Paxful CEO Says Users Can Withdraw Funds—But They Say Otherwise

Ray Youssef—ex-CEO of the now-shuttered peer-to-peer Bitcoin marketplace Paxful—triumphantly announced yesterday that withdrawals are now unfrozen for the vast majority of users. 

"Sleepless night with no engineers or compliance folks but we did it," Youssef wrote. "This is my final act as CEO of Paxful."

According to a tweet from the former executive, 88% of frozen Paxful user accounts are now eligible for withdrawals. Or are they?

Despite Youssef explicitly inviting his followers to post a reply to confirm that they’d been able to claim their funds, Twitter is absent of any such success stories. Much louder, however, is a chorus of unsatisfied users who say they still can’t get their money back. 

In response to a user's report that his funds remained locked up, Youssef wrote, "Don’t bother posting. If it is frozen it is for a reason. Its calle[d] compliance and no CEO can ever undo that."

“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 U.S. regulators,” wrote Youssef added later in the Twitter thread, where he also urged followers self-custody their coins in the future. 

Paxful was forced to indefinitely suspend operations earlier this month amid a combination of executive departures, regulatory battles, and an internal dispute with a Paxful co-founder who sued Youssef after being kicked out of the company last year. At the time, a Paxful spokesperson told Decrypt that “users can get their funds out safely,” though may were still reporting withdrawal issues as early as April 5. 

Faced with a mob of angry customers accusing him of being a “scammer,” Youssef released a video statement on Sunday stressing that he was not “running off with anyone’s money.” He also clarified that roughly $120 million in total funds were on Paxful to begin with, of which $4.4 million remains frozen. 

Though Paxful’s trading volume paled in comparison to mainstream centralized exchanges, it had noteworthy markets in areas like Argentina where hyperinflation had gripped the country’s national currency. 

“Anyone that is saying that somehow Ray would run off and destroy his reputation by stealing $4 million… that’s disgusting,” he said. 

Paxful released an official statement on Monday establishing that Youssef had officially resigned as the company’s CEO. Still more Twitter users responded to the news with more claims that they couldn’t withdraw their Bitcoin. 

"[People] never post thanks when you do things like this. A thankless job," he tweeted. "My word is always good and I’ve taken 8 [years] of [people] calling me a scammer for what the U.S. government does."

Youssef did not respond to Decrypt’s request for comment.