Ray Youssef, CEO and co-founder of Paxful, a peer-to-peer Bitcoin marketplace, announced that the company has unfrozen 88% of all suspended customer accounts, resulting in the release of $1 million in customers’ funds. However, the remaining 12% of frozen accounts are now under the control of US regulators, which Youssef no longer has the authority to unfreeze.
3% of Customers’ Funds Still Frozen
Youssef gave up his CEO title in an attempt to unfreeze these accounts, but 3% of customers’ funds – or roughly $4.4 million – are still frozen and under the control of a custodian. Youssef stated that he refuses to steal these funds.
The Paxful Saga
The suspension of the Paxful marketplace two weeks ago was caused by several key staff departures and industry regulatory challenges. Youssef also revealed that Artur Schaback, a Paxful co-founder who was kicked out of the company, filed a lawsuit against him in January. Paxful was a nominal defendant in the lawsuit.
Youssef claimed that Schaback sued Paxful out of frustration, and that his litigation team’s behaviour chased away the company’s senior-level staff.
“If your account is still frozen then I am sorry but I have no power to unfreeze those funds and they are in the hands of the US regulators. I have no access and have never had access to customer funds,” he tweeted.