Paxful, the peer-to-peer cryptocurrency trading platform, has announced a new chief executive officer (CEO) in a press release on May 30. The executive takes over from the platform’s custodian, Srinivas Raju.
Paxful Has A New CEO
Roshan Dharia, a former senior executive at Trust Token, has been appointed to manage the daily operations of the cryptocurrency platform. His role includes improving operations and considering strategic options.
Archblock, formerly Trust Token, is a Decentralized Finance (DeFi) institutional lending protocol that has distributed more than $1.5 billion in stablecoins to cryptocurrency businesses.
In a statement, Dharia said Paxful pioneered the real use cases for Bitcoin and, in the process, helped millions of people.
Over the last eight years, Paxful has been a pioneer in establishing the real use cases of Bitcoin and helping millions of people. I look forward to hitting the ground running and building on the innovative technology developed by the team.
Paxful faced internal conflicts in the past, which disrupted its operations.
Headwinds That Forced Closure
A lawsuit was filed in December 2022 by Artur Schaback, one of the co-founders of Paxful, against Ray Youssef, the CEO and co-founder. Schaback alleged that he was unfairly terminated and sought compensation.
The departure of crucial members from the P2P team, among them the chief financial and compliance officers, resulted in considerable disruption to operations.
In December, Paxful delisted Ethereum as the smart contracting platform shifted from a proof-of-work to a proof-of-stake consensus system.
However, the struggles within Paxful were compounded by financial difficulties and tough regulations, especially from the United States.
In January, the Commodity Futures Trading Commission (CFTC) asked Paxful for information about their business. The CFTC is investigating whether the P2P ramp operated as a futures commission merchant (FCM) without the proper licensing.
As part of compliance under the FCM, the agency facilitating trades must register and comply with laws meant to protect investors. Paxful, responding to this subpoena, said it doesn’t operate as an FCM and doesn’t custody user funds.
The exchange briefly shut down in early April 2023, saying they couldn’t operate in a way that was sustainable for the business.
However, less than six weeks later, on May 16, Paxful said it was reopening under new management. The exchange also revealed that it had ramped up its security, adding a new fraud detection system.
At the same time, Paxful said it was adding new features and partnering with more firms, including Ledger, the hardware manufacturer, and Simplex, a payment processor that allows the trading of cryptocurrencies using fiat currencies like the USD.
Amid this announcement, the former CEO, Youssef, swiped at Dharia, saying he is a “DeFi CEO” and users should expect a token. He also disassociated himself from the new management.
