The sudden shutdown of peer-to-peer cryptocurrency marketplace Paxful has left its global community scrambling for alternatives, but the Nigerian crypto community appears to have been particularly affected. On April 4, Paxful announced that it would cease operations due to “key staff departures” and the regulatory environment, according to founder and CEO Ray Youssef’s blog post.
Nigeria ranked eighth in crypto adoption and usage among 154 countries, according to “The 2020 Geography of Cryptocurrency Report” by Chainalysis. Paxful played a significant role in expanding the crypto industry in the country by pioneering the use of peer-to-peer technology.
The shutdown of Paxful has left Nigerian crypto users searching for alternatives. Emmanuel Susegh, a Nigerian crypto user, expressed his disappointment, stating that the closure feels like “the death of a loved one” as the exchange helped him make his first $100,000. Susegh relied on Paxful as his go-to platform to trade gift cards from Amazon and Apple for Bitcoin, dating back to 2015.
Obinna Uzoije, a data analyst and member of the Paxful Nigerian community, revealed that in his early career, he utilized the platform to exchange dollars earned from his pay into Nigerian naira. Moreover, freelancers in Nigeria working for international businesses were paid through Skrill and certain users on Paxful accepted these funds, allowing them to exchange it for Bitcoin or cash. Uzoije highlighted that the platform’s shutdown has caused concern among crypto enthusiasts in Nigeria as to what the future holds for such marketplaces.
Akeem Abdullahi, an over-the-counter (OTC) vendor, pointed out that Paxful’s escrow service facilitated the emergence of a generation of OTC vendors. The vendors, who were not technologically literate enough to use the platform, could then buy gift cards from those wishing to sell. Consequently, various community members took to Twitter to voice their worry about users getting their funds back. Paxful CEO Youssef reassured them in a tweet, confirming that the team is currently working on clearing out any send-outs.
