Paxful, the peer-to-peer crypto marketplace, has announced the unfreezing of 88% of previously frozen user accounts, over a week after suspending operations.
In a Twitter thread on April 16, Paxful CEO Ray Youssef revealed that approximately $4.4 million in frozen funds remained on the platform after staff had unfrozen 88% of existing accounts.
According to Youssef, the unfreezing of accounts had been accomplished “with no engineers or compliance folks,” and all remaining frozen funds were “in the hands of” US financial regulators.
Although roughly 3% of total user funds were still frozen, Youssef made the unfreezing his “final act” as Paxful’s CEO. He said, “I gave up my title as CEO to unfreeze these accounts and am also in danger of being in contempt of court.
That is what I did besides a lot of sleepless nights. Nothing more I can do but sleep well tonight. Integrity trumps risk.”
The “contempt of court” claim was likely related to ongoing litigation between Youssef and Paxful co-founder Artur Schaback, who helped launch the platform in 2015.
Schaback claimed in court that the company had been involved in the misappropriation of funds, money laundering, and evasion of US sanctions. Youssef told Cointelegraph at the time that the allegations were “ridiculous.”
The announcement followed the suspension of operations for Paxful users on April 4. At the time, Youssef said there had been some “key staff departures,” citing “regulatory challenges” the platform was facing.
The CEO had already authorized refunds for Earn program users affected by the collapse of Celsius months prior.
The unfreezing of accounts is a significant development for Paxful, as it may help to restore confidence in the platform.
The freeze had caused many users to express frustration and concern, with some claiming they had lost access to funds that they had saved up for years. While the unfreezing of accounts is a step in the right direction, there is still work to be done to ensure that all users’ funds are secure.
Paxful is not the only cryptocurrency exchange to face regulatory challenges in recent years. The industry as a whole has come under increased scrutiny from regulators, who are concerned about the potential for money laundering, fraud, and other illegal activities.
However, many in the industry believe that regulation is necessary to ensure that cryptocurrency can be used safely and securely.
Paxful accounts unfrozen
Despite the challenges facing the industry, the growth of cryptocurrency has continued to accelerate in recent years.
As more people become aware of the potential benefits of using cryptocurrency, demand for these digital assets is likely to continue to rise. While there may be bumps along the way, the future looks bright for those who believe in the transformative power of cryptocurrency.