One of Peer-to-peer (P2P) encryption platforms. Most of the questions in the market came out again without prior notice. Paxful, which has a history of criticism for poor controls and exposure to fraud, quietly stated that It has stopped working since November 1stwithout even sending an email to its users to inform them of the decision.
Paxful operates as a P2P marketplace where users can exchange cryptocurrencies, digital balances – such as PayPal funds – and even gift cards, using local payment methods such as bank transfers or virtual wallets. But, unlike other, more robust options in this sector – such as Binance – the company operated with more lax standards. andForums and review sites were full of complaints from users warning that they had been victims of scams.
Paxful has shut down again and investors are wondering if they will be able to get their money back
The immediate precedent was not encouraging either: In 2023, the company had already announced its closureAmid internal conflict between the founders Ray Youssef and Artur Šabak. The current leadership claims that the costs of “compliance“, combined with restructurings and leadership changes, it has become difficult to maintain.
Despite noting that the company had maintained “financial stability” and continued to grow, they admitted that doubts about its long-term sustainability carried more weight and ended up tipping the scales towards a new closure.
The funds are on pause and the process is more complicated
the The platform confirmed that its priority will be to return the seized funds. However, many users pointed this out They did not know about the closure Until they tried to work and found the site down.
Added to this is an important change: It is no longer enough to log in to withdraw funds. Now, the company requires the provision of personal data and additional documents that will be reviewed on a case-by-case basis. With more than 14 million users around the worldDoubts are growing about the return of the money.
Useless history
Warnings about risks within Paxful are nothing new. One user on Medium reported that a supposed trader on the platform referred him directly to WhatsApp, with no automatic alert systems or blocking to prevent fraudulent maneuvers. The process, which seemed simple to someone just starting out, ended up being a scam in which he lost $1300After being directed to a fake page.
This testimony revealed two major flaws:
- Which Paxvall had read the complaint -Because he uses Medium as a regular communication channel- but he has not taken any action against this issue.
- Which There was no kind of automatic blocking of words like “WhatsApp”. Within the internal chat, there are minimal barriers that could have prevented conversions to external channels.
Unlike Paxfull, orPlatforms that connect users often take measures to mitigate risks: Uber is implementing travel safety features; Mercado Libre filters messages that seek to circumvent the platform; Delivery applications cover delivery failures. On the other hand, in Paxful, risky practices emerged as part of the daily dynamic.
“I was scammed on Paxful”: first-person testimony
An Argentine user who saw him lose all his money in a second on Paxful testified a few months ago.
“Given the need to do it Overseas payment they accept USDT onlyyou chose to resort to Paxfull To change the balance you had PayPalsince other P2Ps don’t have this option. After reading some reviews, I decided to download the app. After registration I went to option Buy USDT Payment is in dollars PayPal. After the recommendations, I only looked at traders who were 100% reputable.”related.
Hook: A supposed message from Paxful, sent via Paxful chat without any type of ban
“And this, supposedly, This will give me peace of mind when working with users who, according to Paxful, always do their part. At least, in theory,” he continues, later explaining: “I opened the order and the chat was opened with the counterparty, who realized it It was my first time at Paxfulplus the fact that I usually work with other, more popular P2Ps. That knowledge of the system peer to peer “It may have given me confidence in a mechanism that I assumed was an industry standard.”
The user adds it on the other side of the chat They told him that such low money could not be sent to Argentina and the operation had to be larger.. So I had to add more money. The message that sounded Paxfullusing your Paxful username and within the Paxful chat.
They added from there WhatsApp They gave it more definitions. They also asked him to scan a QR with the look and feel of Paxful To increase the system, which he did.
Beware: Even positively rated traders can scam you
“It was the beginning of the end. “The user hijacked my account, took all my money, and cut off all communications,” he says. He added: “I imagined it.” A global company like Paxful will have some sort of user control or protectionlike the one Mercado Libre offers when chatting with a seller: Any data that attempts to take me off the platform will be quickly blocked, with the corresponding reputation removed.
“I felt doubly cheated. First, for the trader, then for the platform I trust. But I wasn’t the only one,” he warns.
A more comprehensive search on Google resulted in a post dated Mediation. “The user in question has analyzed their condition as I was saying it,” he says. “It is impossible not to feel déjà vu.”
Page scammers redirect to Paxful
“A conversation on WhatsApp appeared to be legitimate, which is a low transaction for a user who is just starting out on the platform And redirect to the same site I was redirected to. Result: “This user lost $1,300 and has no hope of getting it back.”Sorry.
The user comes to two conclusions:
- Paxful must have read this postBecause it uses the medium as a means of contacting users
- A pity: that Paxful has not reported this site Or at least has an automatic blocking of any chat message containing keywords like WhatsApp?
It is very common for these types of companies to limit themselves to providing the platform only. but Other companies that bring users together mitigate the risks: Uber Launches measures to prevent travel crimes, Free market It blocks communications from sellers or buyers seeking to leave the platform, and compensates delivery apps if an order arrives incorrectly.
“The average user recommends seven ways to avoid being scammed. I’m adding the only thing that works: never use Paxful”The victim concludes