Topic: Paxful is shutting down (Read 389 times)

I'm thinking right now those people that have seen posting in many forums that they've got funds remaining on the closed exchanges. And with this, if someone who's an active user of paxful before and haven't used it for quite a while and isn't a regular checker of his emails, socials and updates then they might just miss this update and closure and the funds won't be retrieved anymore. I'm sure that this is quite rare but it do happened for some before. Just as looking at the update on their status page, well, there's still the maintenance towards its wallets. By the way, is the CEO has strong connections with the other companies he has mentioned?

I don't do crypto to crypto day trading, I am only doing crypto to fiat and vice versa.

So, I am concerned about withdrawing fiat which is different from p2p, ofcourse we can use Binance p2p but the offers are low and also the tranders are known or atleast under the radar of cryptocurrency activities via their bank account which I certainly want to avoid because I remember your funds in bank account can be frozen because the trader you conducted a trade has a connection with funds received from a hacked bank account.

What do you mean by that? It's not really any different than Paxful or LBC.

I'm not sure if I understood you correctly, but when you deposit, you can deposit directly to the Funding wallet (the one used for P2P trading) and when withdrawing, you should be able to withdraw from either (Spot/funding). You're not required to move funds between accounts and then withdraw.

Binance is a good choice but I don't prefer centralized exchange's p2p because when we cash out from the platform the funds will be deposited via exchange which I don't prefer for some reasons but I want to state that cryptocurrency is not banned and Binance also available. When it comes to p2p I still prefer the traditional p2p exchange whether it needs kyc or not because I am comfortable with KYC and I do trade for big amounts so certainly I have to atleast do ID verification to get decent limit.

If you don't care about KYC, then Binance is a good alternative and it doesn't have any fees.

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Update: it looks like the status page was reporting accurate data at the time I posted this:

The news is shocking to me as well because those two P2P which are LBC and Paxful operated for years now shutting down one by one, for me it's still hard to find the alternative after LBC since I used to be a day trader. So what are there real alternatives now?

I know that Bisq is true P2P but as I said before still the volume for my fiat is zero so hopefully I can see some volume here after. The P2P offered by Binance and other centralised exchange is the real reason behind the shutting down of LBC and Paxful!!!

You can transfer the fiat using any of the usual electronic methods or via cash.

How do they know you have any coins? If you've done things properly, then you've traded exclusively peer to peer, you've not signed up to any centralized exchange or other centralized service, and you've not handed your KYC over to any third parties.

Ok but do I understand correctly that when I want to acquire Bitcoin with fiat via Bisq that Bisq only handles the Bitcoin transfer while I have to use the traditional banking system to wire the fiat money? Once financial authorities get involved asking me for the origin of my coins, I would have to tell them anyway with whom I transacted. It is still better than doing it directly via a centralized exchange, but a result could be that they do get the data they want either way. The problem is that the governments are trying to cause trouble for you if you can't properly prove the origin of funds. I am not a fan as you can imagine of what might be coming our ways in Europe. I hope it is not going to happen the way they wanted it to happen like a year ago or so. So far it is still all cool, but one reason for that might be that people do actually pay their taxes. If they weren't, there would be more incentive for authorities to crack down (besides their hunger for limitless data).

I read through this news yesterday, and this move made by the CEO of Paxful, to me, is the best decision anyone who has the interest of its customers at heart should do, after a proper analysis of the whole matter, what the company is going through, the attack from competitors, the indirect attack from the US, etc. It's better for them to shut down like they just did, giving every user the right to withdraw their funds to a safer place. They even advise users to be careful about which platform they choose to use next. 

Assuming the CEO is blind to things happening in the exchange, we could have woken up one day to hear that another exchange has filed for bankruptcy. So I will advise users to safely go and withdraw their funds now that the server is still open before another negative announcement is made. 

So was I, until several years ago when they transitioned to demanding KYC from all their users as Solosanz has provided links for above. At that point I immediately stopped using them and transitioned to better options. Now I use mostly Bisq, but a handful of other platforms too.

After the FTX collapse, i think more and more users will realize that the CEXs risk due to security and not transparency.

In addition,many CEXs including Binance,Coinbase,etc. faces possibly its strongest regulatory pressure yet, with centralized exchanges feeling the brunt of it so far. The U.S. Securities and Exchange Commission went after Kraken for its staking service, and issued a Wells Notice to Coinbase, while the Commodity Futures Trading Commission accused Binance of evading U.S. law.

So that crypto traders will shift to decentralized exchanges(DEX)s or transparency exchanges(TEXs) ,for the decentralized exchanges(DEX)s,it is more transparent and safe, but have the issues such as high threshold and complicated operation.For the transparency exchanges(TEXs),which find a balance between transparency and user experience, ensuring transparency and security, there is no need to sacrifice user experience.

Localbitcoins used to be no KYC P2P platform, but now isn't not anymore. I think you're talk about few years ago and it's already a lot change of less KYC centralized exchange, turn out become KYC exchange.

In 2019, you can use LBC with T0 tier which consist of your full name, country of residence, email address and phone number, with limit 1,000 Euros/year.

But now there's no T0 anymore, the minimum is T1 tier where you need to submit your physical address check, ID verification and KYC info.

I was trading heavily on localbitcoins for years, in person trades and money transfer services and I never had to fill out any KYC forms. Never sent in ID, or any identifying information outside of a phone number that I used to talk to buyers and sellers. Not sure why you feel there was no privacy? Localbitcoins staff having Access to the communications on the site during the open trades? I found it extremely useful to have a web of trust with people I traded big amounts of coin with and I liked an effective escrow system for money transfer trades.

I was previously unaware of kycnot.me I'll look through the site, thank you for the recommendation.

Yeah, and Queen is having the music tour of their lives for the past 6 months

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It's hard to feel bad for Paxful though. There were reports on reddit months ago that their marketplace has become almost rampant with scammers offering fake trades that will be reversed.

"1 more down, x remaining." is probably what the regulations and law-imposing authorities must be thinking now after the closure of Paxful. They are getting more and more success in their venture of taking down all the projects that are providing P2P trading services and allowing citizens to buy or sell Bitcoins with fiat.

We all know how much they hate Bitcoin for being a rival of fiat currencies and providing users with financial freedom and that is the reason why they are always trying to find more options and impose more regulations and laws to corner projects so that they shut down their services if they can't comply by the regulations.

The solution is simple: Don't use centralized exchanges.

I don't need to use a centralized exchange to "cash out" my bitcoin, since I can either spend it directly with merchants or trade it peer to peer just as I did when I bought it.
I don't care if centralized exchanges start demanding even more ridiculous KYC or require you to identify all your personal addresses to them. I will never use them and so they have no jurisdiction over me whatsoever. If anything, such draconian rules will just push more and more people to trade using real DEXs, not these centralized fakes like LBC and Paxful.

This will remain an interesting topic and while I believe that more decentralized or anonymous p2p exchanges will become relevant, one has to keep in mind that in some countries authorities plan on expanding the proof of funds law. In my country it could already happen that if you engage in an anonymous p2p exchange without documenting who the other person was, you could have a problem when you once cash out the Bitcoin in an official way and financial authorities ask you to verify the origin of those Bitcoin in the first place. Even though you have done nothing wrong, paid a market price for the Bitcoin and you didn't use funds from criminal sources, a p2p exchange could turn into a problem.

Further, they plan to force exchanges to KYC every single self-custodial wallet address that is used to send crypto to an exchange. I guess the agenda is clear here: undermine even the last little bit of privacy wherever possible. In a worst case scenario you are depositing Bitcoin that you earned doing some freelancer work to your exchange account, then the Bitcoin get frozen at first until you provided KYC for that address and a proof for the origin of those funds. The goal is also to make it hard to use crypto and reduce its everyday utility. That's so outdated and counter-innovation (weird this sounds like a description of the banking system). The powerful banks are often those who complain about crypto and demand stronger regulation for any crypto-based service or functionalities.

Neither LBC nor Paxful were in any way anonymous - they were both entirely centralized and required all the usual ridiculous KYC. If you used either you did not have a shred of privacy.

Not true. There are dozens of actually peer to peer/decentralized/anonymous exchanges: https://kycnot.me/

Well, considering I've been trading in person for years and have never once used Paxful, the answer to that is a resounding no.

It seems the domino of bankruptcy and insolvency is now being replaced with a domino of voluntarily giving up. But I think this isn't part of it. It seems this isn't even about regulatory policies smothering them. Perhaps it is convenient to drop this regulatory challenges excuse, but this isn't the primary reason. This is also not about centralized platforms offering P2P, competing against them. 

This is most probably the result of Youssef's co-founder Artur Schaback's lawsuit against both Paxful and Youssef. Schaback was kicked out by Youssef more than a year ago. Schaback then filed a lawsuit in Delaware 3 months ago. As a direct result of Schaback's legal actions, the "key staff departures" that Youssef mentioned happened. To the point that "there were no engineers, compliance team members, or security personnel left working at the company." This actually prompted Youssef to shut down the platform, specifically its security implications.^[1]

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[1] https://decrypt.co/125411/paxful-bitcoin-marketplace-closure-cofounder-lawsuit

I also lean towards the scenario that competition is the main reason behind this closure, although I am surprised at its speed, as many people use this platform to buy and sell gift cards, which is relatively good and may enable them to hold out for a while, but what happened happened.

Most of P2P platforms are centralized, and those that have been closed are completely centralized, so I do not think that they will have an impact on the market, as alternatives are available.
I hope this war on central platforms ends because it accelerates lockdowns.

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@OmegaStarScream How do you do it? You are almost the first one who's posting topics about closing platforms.

What?! So what are the remaining?
P2P exchanges/marketplace are getting shut most probably of regulation reasons. Privacy platforms are getting shutdown as well.
Looks like global adoption and regulation have massive negative impact now. Well, well, well.

Unfortunately, we heard the sad news today, I was really sad to hear the news of these successive closures, for months we have been hearing about the closure of these large services Localcryptos, Localbitcoins and now Paxful and we do not know who is next.

These services did not shut down due to US regulatory pressures but rather due to the financial crises and the bad state of Crypto in general as business has come to a grinding halt and it has become difficult to continue operating.

All this is in addition to the harsh regulatory pressures by the US government that led to the closure of chipmixer and since the days of the Bittrex exchange.

Lots of closings in the market and we don't know what could happen next.

Sadly, this feels like the banks and big government will move in to further regulate the buying and selling of bitcoin.

Both Localbitcoin and Paxful presented a ton of anonymous yet safe options to buy bitcoin, from prepaid credit cards, to gift cards, to western union and moneygram transfers. It seems for western-based traders only bitcoin atms and exchanges that are fall under KYC rules will be available to buy and sell bitcoin.

Does this kill off in person trades in the US. Will another centralize place with a trusted escrow and review system rise to take it's place? Or will we have to only depened on exchanges that can shut down and run off with customer's funds?

I'm sure the news surprised us all and disappointed because despite being a popular platform for buying and selling, Paxful has been facing increasing regulatory pressure and this, in my opinion, is the real reason behind its suspension. The regulatory authority on the platforms started since the beginning of the year after the collapse of Ftx, we lost the two largest platforms for peer-to-peer transactions localbitcoins and Paxful. I don't know if there are alternatives that have the same degree of credibility.
And as the pressures continues to evolve, it will be interesting to see how other platforms would respond to similar challenges. What is happening with many platforms recently highlights the need for the industry to work towards more stable and sustainable solutions for the benefit of all parts.

Obviously, the model is not the same as Paxful, I agree. But so was localcryptos. It's still vulnerable to external pressures since it's not decentralized.

HodlHodl is not censorship resistant to even any degree like Bisq. Government and law enforcement can shut it or force the owners to shut it down anytime they want.

Paxful was just another centralized, KYC demanding, zero privacy, zero security exchange, which used the label "peer to peer" as a marketing gimmick despite being no such thing. Just like LocalBitcoins. I do not care in the slightest that they are shutting up shop.

Noones is absolutely just Paxful under a different name and excluding the US. It also has the same KYC requirements, centralized wallets, and all the other downsides of centralized exchanges.

If you want to use an actually decentralized exchange or trade actually peer to peer without these centralized exchanges spying on you and taking control of your coins, then pick an exchange from here, ideally Bisq or RoboSats: https://kycnot.me/

It's a difficult time for people in countries that don't have vendors who trade bitcoin with bank transfers. How can people who don't like patronizing centralized exchanges convert their bitcoin to fiat? Localbitcoin and paxful gone in a twinkle of an eye, the market is losing lots of good projects. These two p2p platforms provided good rates and good user interface. Well, I see some p2p platforms coming out in the market, yet to confirm their authenticity. It'll be risky to move quickly to startup p2p platforms as lot of it are sprouting out to deceive people since top platforms are getting closed. 

I took a look at noones' p2p marketplace and it's basically paxful lol. Their help articles [about the p2p marketplace] are also similar indicating they work similarly.

https://paxful.zendesk.com/hc/en-us
https://support.noones.com/hc/en-us

Furthermore, some people are reporting they were automatically able to login to noones using their paxful login information. Note that this doesn't apply to banned countries in noones like USA, UK, Canada, etc.


Makes me think paxful just moved to a different jurisdiction under a new project...

I've say it with localcrypto-localbitcoin. They will all have the same restrictions, obey to the same laws etc, and no matter what is the country location.
Do you really belive nothing will change and the companies will be operating without to bother with AML stuff? You're dreaming
Once the purge will be done with marketplaces, watch out for the instant exchanges to be the next target. KYC will be a must, even for just $1

Marketplaces, CEXs, instant exchanges, deal with money, like banks do, so everyone in the same bag and everyone with the same financial laws.
It's what I call "justice" to be fair with everyone


So according to this logic, Binance should also stop its business since Chipmixer used this exchange

From what I read, they could have been affected by the Celsius bankruptcy. They established a partnership with Celsius to offer their users to earn yield money on their bitcoin. Apparently, when Celsius collapses and so is the bitcoin of their users, and as such the CEO of Paxful, refunded their customers their money from Paxful's own pocket. And it could possible cost them a lot at this point.



https://twitter.com/raypaxful/status/1641105827892264960

That's Paxos, not Paxful, no relation other than the similar names.


Not really that much different and Localcypto went down just as surprisingly, so every single one of them going down won't surprise me.

I guess it more relates to Chipmixer money laundering on Paxful (if you read the report) than relates to Celsius.

Both Paxful and LocalBitcoins were used by that man and likely Peer-to-Peer marketplaces are now more regulated by US government. They have to go ahead and shut down their services or they were requested to do that.

https://www.justice.gov/opa/press-release/file/1574581/download

There was no real reason stated in the message. This must have started when SEC stopped Paxful from printing BUSD.

Not allowing altcoins to be withdrawn. I can only assume they were forced by the government not to let users withdraw the assets deemed to be security. They may not totally shut down but will just allow users to claim those altcoins when regulations are ironed out.

Centralized exchanges with so called P2P has forced all of them to shut down? Ridiculous. After Binance, Kucoin and some other CEXs offering fake P2P transactions, all of these are getting shut down!

I dont know anything about Remitano but Hodl Hodl is pretty much better service. I dont think itself going to shut down. Their business model isn't the same of Paxful.

First it was Localcryptos announcing a shutdown around 21 October last year  - LocalCryptos is shutting down and then Localbitcoins annouces on 9th- Feb 2023 that they as shutting - LocalBitcoins will discontinue its serviceand now paxful!

Which one next? HodlHodl? Remitano?

I think we are now seeing a pattern here.

I think most of them are shutting down before regulators come for their asses, or they might have already received warnings, especially given the fact that they are headquartered in known jurisdictions that can act cocky towards crypto at any time. For example Localcryptos was Australian based, Localcryptos was based in Finland, Paxful is based in Delaware US though some sources claim that they have head quaters in Estonia

I also saw an hour ago the latest news about Paxful exchange, as Youssef said.

PEER-TO-PEER BITCOIN EXCHANGE PAXFUL SUSPENDS MARKETPLACE

We hope that users who use the Paxful exchange and who don't know this information, with the topic created by @OmegaStarScream, can help to solve their problems, especially regarding funds.

And another goes down, let's see how many will be left by the end of the year.
Never used it although I have an account there but I can picture the impact in countries where it had way more usage, wonder where will all migrate, it's Binance and Bybit maybe? With locabitcoin gone, localcrypto gone, DEX not really gaining traction despite all this mess seems like there is only one temporary winner here, that until due to another series of "regulatory challenges".

Btw, does anyone have a clue what kind of regulatory challenges are they all talking about, cause everyone claims the same thing without bothering to go one sentence further? 

Apparently, Paxful (one of the largest[1] P2P exchanges) is going to close its doors. I just saw this on Twitter:



This comes days after Paxful had some issues processing users withdrawals[2].

The message states that users should withdraw their funds but according to the status page[3]. The wallet system is down for all their supported currencies with the exception of Bitcoin's lightning network.

[1] https://monetory.io/en
[2] https://bitcointalksearch.org/topic/paxful-deposits-are-not-being-credited-5447245
[3] https://status.paxful.com/