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If you have been in the crypto sphere for some time, there are two things you should already know: you should never want to invest more money than you can afford to lose, and you will never want to read the words “Please bear with me; I don’t wanna go to jail,” from the CEO of a major exchange – for example, Paxful.
On April 6, Ray Youssef, CEO and co-founder of Paxful, a US-based P2P Bitcoin exchange, announced that he is working on a plan to reimburse users’ funds using his own money in an effort to comply with the law and avoid getting into deeper legal issues following the sudden shutdown of his exchange.
Youssef stated that he is at risk of going to jail for failing to comply with court orders concerning the return of Paxful’s frozen funds, which led him to take such a drastic measure.
The Paxful co-founder explained he is taking such a risk because, otherwise, funds might “fall into oblivion,” and users might never be able to recover them. However, he asked the community for patience while carrying out this task.
Updated on frozen funds: I am working now clear a plan with the court where *I* will make users whole out of my pocket. I am already in danger of being held in contempt of court. I always put user funds first. Please bear with me. Don’t wanna go to jail 😓 but still swinging !
— Ray Youssef (@raypaxful) April 6, 2023
Paxful and Youssef Were Sued by a Former Partner
Youssef said in an interview that his troubles are largely due to a legal dispute with Artur Schaback, another Paxful co-founder, who was dissatisfied with his departure from the company and accused Youssef of excluding him from internal operations and making fraudulent fund transfers.
“In the middle of January, my co-founder decided to sue the company and myself. The litigation got really nasty and he scared away our best people. My entire chief level staff resigned. I had no operational staff.”
He added that Youssef’s dismissal “was like some kind of horrible divorce” since his former partner was fired more than two years ago for various reasons, including “incompetence and misconduct,” refusing to participate in the company’s internal investigations.
Youssef’s goal before facing the current issues was to build a network of decentralized, non-custodial Bitcoin marketplaces that would become “the most exciting thing since Bitcoin.” However, this dream seems to have been extinguished after the regulatory issues that hit the company and the lawsuit from his former partner.
US Regulators And The Crypto Businesses
As CryptoPotato recently reported, Paxful added its name to a list of cryptocurrency exchanges that shut down or were affected by regulatory pressures, specifically from the US government. The company spent millions of dollars trying to comply, but “it was not enough,” Youssef indicated.
Although Youssef was forced to close his seven-year-old company, his desire to keep working in the crypto ecosystem is far from over. The entrepreneur is working alongside Jack Dorsey, the co-founder and former CEO of Twitter, to launch a decentralized P2P bitcoin trading platform called Civilization Kit (Civ Kit).
According to Youssef, the platform will launch in less than two weeks. Will Civ Kit be a Paxful clone, or will it be a brand new, exciting development for the Bitcoin ecosystem?
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