Ray Youssef, the co-founder of Paxful, has warned to stay off the platform amid complaints of scams.
As a peer-to-peer (P2P) marketplace, Paxful provides the infrastructure, including moderation, for users to buy and sell cryptocurrency from each other.
Paxful closes, reopens
The peer-to-peer marketplace closed in April, with Youssef acknowledging the resignation of several key staff members. At the time, however, he remained unwilling to elaborate on what else was going on behind the scenes.
Weeks later, Youssef said mounting regulatory pressure in the US was to blame as he warned people about the dangers of doing business with US-based financial firms.
“They will confiscate your money and won’t even give you a reason because they can’t under the law. The system itself is designed to hurt you.”
During this time, he said he was thawing funds seized by US regulators – his last act as CEO.
On April 21, Youssef announced his resignation from the company – pledging to heal those users he was unable to help at the time.
Although the company managed to release 88% of the funds, about $4.5 million remains frozen.
Paxvol has offices in Estonia, the UK, the Philippines, Dubai and St. Petersburg and does significant business outside the US, but is headquartered in New York.
Users are scammed
Paxful reopened its peer-to-peer marketplace on May 8. Since then, users have reported being scammed on the platform.
become a victim, Mitch contacted Youssef and said he had been scammed. Youssef responded by saying he was powerless to help, adding that he had been banned from the platform.
“I am no longer the CEO of Paxful and have no control over what goes on there. They also banned me. Good luck and don’t trust anyone [sic]. #self-preservation.”
Mitch further begged for help, explaining that he had lost eight months worth of $660 in savings, but Paxful has not addressed the issue.
Youssef reiterated that he is unable to resolve the issue, also mentioning that he took his money from Paxful and “will not act there.”
Likewise, Kamwana reported that they sold crypto and then refunded the money due to PayPal being incorrectly received from “Goods and Services” instead of “Friends and Family” only for the moderator to release crypto funds to the buyer.
Reply to this post, one more Twitter user said he lost crypto the same way.
Intense speculation surrounds what happened at Paxful and the apparent collusion between moderator and scammer that unfolds.
Youssef was asked if the company was a victim of a hostile takeover, and he replied“It was much worse than that.”