Ray Youssef, the CEO of peer-to-peer bitcoin marketplace Paxful, announced his resignation on April 21 and promised to make Paxful users whole again.
In a Medium post, Youssef said that he will put 99.9% of his personal shares in Paxful, which accounts for over 45% of the company, into a public trust. The funds generated by his shares will be used to make every Paxful user whole, and anything remaining will go towards the Built With Bitcoin Foundation to build schools.
The decision came after Youssef expressed concern for the future direction of Paxful due to not trusting his co-founder “to have access to or control over user funds.” The pair have agreed to Srinivas Raju, a court-appointed custodian, becoming the custodian of Paxful through the process.
Despite Youssef managing to unfreeze 88% of frozen user funds, approximately 3.3% of total customer funds are still frozen, amounting to just under $4.5 million. Youssef’s priority will continue to be the resolution of frozen user funds and the reliability of the Paxful Wallet. To prioritize user funds, he said he will ensure the Paxful Wallet remains operational for at least two years “to ensure that people have access to their funds.”
Youssef previously offered his co-founder a deal to purchase all of his shares in Paxful for just one satoshi, on the condition the co-founder carry out necessary compliance work to unfreeze the remaining accounts. However, the co-founder refused this offer.
“I want Paxful to be an example of how a bitcoin company was faced with suffocating U.S. regulations and a greedy and selfish bad actor, but still overcame,” said Youssef. He hopes that by being transparent about what is happening behind the scenes at Paxful, the company can emerge from this situation as a positive example for the wider bitcoin community.
Raju now holds total authority and control over the company’s operations and management, and will try to stabilize Paxful while preparing his recommendation for the court on how the company should proceed. With Youssef’s commitment to putting almost half of Paxful’s shares into a public trust, the hope is that the remaining frozen funds can be returned to users, and that Paxful can continue to operate as a trusted platform for buying and selling bitcoin.
