Paxful Accused of Performing Fraudulent Activities After Suspending Accounts
Paxful, a cryptocurrency marketplace that allows users to buy and sell virtual currencies, is accused of defrauding Nigerian clients using the platform. The Nigerian Non-Governmental Organization, United Global Resolve For Peace (UGRF), informed to the Central Bank of Nigeria (CNB), that the crypto exchange Paxful did not allow Nigerians to withdraw their funds. The Economic and Financial Crimes Commission (EFCC) and the Ministry of Foreign Affairs have also been contacted.
Paxful Accused Of Freezing Users’ Funds
Paxful became very popular in Africa due to the fact that P2P trading started to grow in the country as the preferred trading method. At the same time, individuals were purchasing Bitcoin (BTC) using this platform and it attracted a large number of users.
There were several reports that showed that virtual currencies in developing regions, including Africa or Latin America, are used as a tool to send and receive funds. The utility in these countries is much larger than in developed economies, which virtual currencies are mainly used as a way to speculate with their price.
Apparently, Paxful has decided to suspend the accounts of different Nigerian subscribers barring them from access their funds. Some individuals claimed that the platform blocked the accounts of individuals suspected of performing illegal activities, however, the petition says that there is no evidence that these users were involved in these kinds of criminal activities.
There is a victim that said that there are three million Nigerians using the platform. Although there have been many complains in social media about this situation, Paxful stated that it only shuts down accounts suspected of being used illegally.
“All accounts that have been shut down have a reason for it,”
the company explained.
“We will not shut down any account unless they violate our TOS (Terms of Service).”
The co-founder of Paxful, Ray Youssef, said that selling used gift cards over and over is fraud and a crime. He mentioned that they will be using the funds from criminals and scammers to improve schools or compensate victims of scams.
Paxful has a very important market in Nigeria, where 40% of the transactions that take place in the platform come from. Thus, they handle around $20 million each week in Bitcoin, and the number continues growing. The NGO explained that this exchange is based in Estonia and it is not regulated in Nigeria.
Warning to all scammers who think tweeting or contacting me will help. I will double your suspension time at the very least. No room for bad actors.
— Ray Youssef (@raypaxful) April 7, 2019
To the victims of said scammers, any left overs go to building schools, although there never is any since scammers almost always remove their funds after the scam. School 1 and 2 are done already. #3 and 4 on the way.https://t.co/6FmhlzbMhq pic.twitter.com/RS4haY9JVZ
— Ray Youssef (@raypaxful) March 20, 2019
One thing is clear, there are several scams taking place on the platform and Paxful seems ready to take action against this.