Paxful unfreezes 88% of frozen user accounts amidst its legal challenges. The exchange reported that it had unfrozen 88% of the user accounts that had previously been frozen following the suspension of its operations.
- Paxful ceased operations on April 4th due to “key staff departures” and “regulatory challenges” faced by the platform.
- Despite legal objections, Paxful unfreezes 88% of frozen user accounts.
- According to the CEO, the remaining $4.4 million in frozen cash is currently being held by US financial regulators.
With operations in over 160 countries, Paxful is one of the largest peer-to-peer cryptocurrency markets. Users can buy and sell cryptocurrencies on the platform using a variety of payment methods, including bank transfers, credit cards, and gift cards.
The cryptocurrency exchange ceased operations on April 4th due to “key staff departures” and “regulatory challenges” that the company was facing. Many users were unable to access their funds as a result which drew criticism from the community.
Following the suspension of its activities, the exchange reported that it has unfrozen 88% of the previously frozen user accounts. According to Paxful CEO Ray Youssef, the remaining $4.4 million in frozen cash is being held by US banking regulators.
Youssef announced the news on Twitter on April 16, adding that the accounts had been unfrozen “with no engineers or compliance folks.” He further mentioned that the process of unfreezing had lasted more than a week.
Youssef’s decision to resign as CEO was motivated by his desire to unfreeze the accounts, even if it meant facing “contempt of court.”
“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.”Ray Youssef
Many in the crypto community were surprised by Paxful’s move to freeze user accounts. Other than declaring that it was required to comply with regulatory obligations, the corporation did not provide a clear explanation for the move.
Paxful has been attempting to reassure its users following the announcement of account unfreezing. The company has indicated that it is committed to regulatory compliance, but it also recognizes the value of customer service and user experience.
The unfreezing of the bulk of Paxful’s frozen accounts is a welcome move for both the firm and its users. However, it is unclear how the remaining frozen cash will be handled by US financial regulators.
The decision by Paxful to freeze user accounts shows the continued difficulties that crypto exchanges face in meeting regulatory standards.
Featured image @thecoinrepublic