Tensions between Paxful co-founders Ray Youssef and Artur Schaback spilled into public yesterday, as the peer-to-peer Bitcoin exchange abruptly announced it had suspended operations. While Schaback hopes to resume operations, Youssef has apparently recommended a new provider to Paxful users. In a Tuesday message posted to Paxful’s website, Youssef—the company’s CEO—urged Paxful’s users to withdraw funds from its platform and explore alternative venues, citing the departure of key employees and ongoing regulatory headwinds in the U.S. He wrote that it was unclear whether Paxful will resume operations, suggesting that its future was in jeopardy.

During a subsequent Twitter Spaces, Youssef said that a lawsuit filed against Paxos and himself by Schaback was an untenable factor weighing on the firm, claiming that it prompted important team members to quit. Schaback told Decrypt that Paxful’s decision to suspend operations came as a shock. And while he conceded that the platform’s suspension of operations could end things entirely, Schaback said he plans to get the marketplace up and running again.

When Youssef directed people to explore other trading venues on Paxful’s website yesterday, he suggested users choose another firm called Noones—a “super app” with similar features labeled as “Ray’s Recommendation.” Noone’s website states the company is based out of Europe and the United Arab Emirates, founded by “a small group of passionate Bitcoiners who are dedicated to peer-to-peer in the Global South,” including Nicholas Gregory and Yusuf Nessary. Youssef said he doesn’t have a direct role at Noones but supports the company.

The root of the disagreement between Youssef and Schaback can be traced back to 2021 when a potential deal between them fell through. It involved potentially buying out Schaback’s stake in Paxful. Multiple accounts on Twitter reached out to Paxful users on Tuesday, saying that they “can log in to Noones with your Paxful credentials & your KYC, trades, etc will be there already.” Paxful clarified on Twitter that the two companies are not affiliated.

Some users in what appeared to be Noones’ official Telegram channel said they were able to log in to the platform using their Paxful credentials without any issues, while others asked for help. The functionality is part of several referral deals between Paxful and other marketplaces as the company looks for any passive income it can get to stay afloat while users withdraw funds. Youssef said he wants the Paxful wallet to stay up for at least two years.

The two co-founders expressed differing accounts not only about Paxful’s potential future but also regarding the nature of Schaback’s lawsuit—filed in Delaware Chancery Court in January. Schaback’s lawsuit accuses Youssef of several “egregious, unauthorized, and self-interested actions,” such as “looting the Company’s coffers” and a “surreptitious scheme” meant to freeze Schaback out of Paxful. Youssef has denied these allegations.

Tensions between Paxful co-founders Ray Youssef and Artur Schaback came to a head yesterday, when the peer-to-peer Bitcoin exchange announced it had suspended operations. Youssef has recommended Paxful users to explore alternative venues, citing the departure of key employees and ongoing regulatory headwinds in the U.S. A lawsuit filed by Schaback against Youssef and Paxos prompted important team members to quit, according to Youssef. Schaback hopes to resume operations while Youssef has directed people to explore a new platform called Noones. This platform, founded by “a small group of passionate Bitcoiners”, appears to have similar features and users can log in with their Paxful credentials. The root of the disagreement between Youssef and Schaback dates back to 2021 when a potential deal between them fell through. #Bitcoin #Paxful #Noones #Cryptocurrency

You can read more about this topic here: Decrypt: Future of Paxful Bitcoin Exchange in Flux As Co-Founders Fight

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