Wednesday, April 24, 2019

Paxful Stops Nigerians from Accessing Crypto Wallets in Alleged Scam

Several Paxful users in Nigeria have reportedly been having issues with accessing their Bitcoin wallets amounting to millions of dollars on the exchange platform. The firm behind the Paxful wallet, Paxful Incorporated, operating out of Estonia, is being suspected of performing a mini exit scam on its Nigerians users. According to complaints, most users can no longer access their crypto assets or log in to their wallets account.

Paxful’s Activities on the African Continent

The cryptocurrency services firm has been appearing in African local news once in a while due to their philanthropic activities. Paxful has constructed schools in Rwanda, with a milestone of setting up a total of 100 schools. Also, Paxful gave out $15,000 in scholarships for female Afghan refugees residing in the US to enhance their education. The crypto wallet has also started operations in creating a blockchain centre in Nigeria’s most prominent city and former capital, Lagos.

An NGO called United Resolve for Global Peace has made a request to the Economic and Financial Crimes Commission (EFCC), Nigeria’s foremost financial crime agency, accusing the Estonian firm of fraud. The financial crime agency has confirmed that they have gotten the petition and will start looking into the situation.

The NGO made this petition on the 2nd of April, while noting that the accounts that were suspended did not go against Paxful’s guidelines as well as get involved in any fraudulent act. The United Resolve for Global Peace stated that;

“A few days ago, our organization was approached by some Nigerians who complained bitterly that Paxful Incorporated, the company that owns the online cryptocurrency trading and exchange platform, ‘https:paxful.com’ has been ripping them of their life investment in cryptocurrency by suspending their accounts, deactivating their wallets and refusing to return the value in their accounts.”

In the petition made to the EFCC, it was noted that out of the $20 million profits that Paxful made last year, 40% of it came from Nigeria. The NGO also mentioned that Paxful had gone against all the rules guiding commercial transactions and had commenced a system of defrauding Nigerians of their money.

Interaction with Paxful’s CEO

A Nigerian trader who claimed that $7,000 worth of his bitcoin was held by Paxful, accused Paxful’s CEO, Ray Youssef of calling Nigerians scammers on a forum, although no such post has been found. Ray Youssef, however, reiterated that the banned accounts would not be reinstated, noting that incessant fraudulent acts by Paxful users were killing the platform.

Ray Youssef also said to a news outlet that he wasn’t sure the NGO that made the petition to the EFCC was even real. He said that the nature of the NGO remains unknown.

Paxful’s official Twitter account hasn’t explicitly said anything on the matter but reiterated that any account that was slammed with a ban was slammed for a good reason.

The central bank of Nigeria, the CBN, does not authorize cryptocurrencies in any form. In March 2018, Nigeria Deposit Insurance Corporation (NDIC), cautioned its citizens against the usage of digital currencies stating that in the case of any exit scam or fraud, there would be no insurance.

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