Nigerian Crypto Users React to Paxful’s Decision to Shutdown
- Nigerian crypto users believe Paxful’s demise will make it difficult for most users in the country.
- The Central Bank of Nigeria banned crypto trading and transactions in 2021.
- The financial regulator claimed the move was to curb the use of cryptocurrencies for crimes such as money laundering, arm purchases, and terrorism financing.
Peer-to-peer marketplace Paxful announced on Tuesday that it would shut down its operations due to the departure of key employees, regulatory uncertainties, and a recent lawsuit filed by one of the company’s co-founders. While the decision was shocking to the broader crypto market, Nigerian crypto users seem to be the most affected.
Nigerians relied on Paxful’s peer-to-peer marketplace to carry out crypto transactions following a ban on crypto trading in the country. A Chainalysis report ranked Nigeria 8th in crypto usage and adoption. Google searches also showed that Nigerians were the most curious crypto users.
Accounting service provider Recap created a list of the top 50 crypto hubs and Nigerian cities Lagos (14) and Ibadan (24) ranked among some of the top cities. However, Paxful has a huge role in this growth. Paxful is credited with expanding Nigeria’s crypto industry with its peer-to-peer service.
In a 2022 interview with Business Africa Insider, Paxful’s CEO named Nigeria as its largest market, with 1.5 million users and over $1.5 billion in volume. However, the company’s demise has left users in the region stranded for alternatives.
Chima Lewechi, 30, told Bitnation that Paxful helped him trade gift cards for Bitcoin and that losing the exchange was a “disaster” for the Nigerian crypto community. Some other Nigerian users explained that Paxful proved useful in exchanging dollars for the Nigerian naira.
Reacting to the situation, Maxwell Ugonna, a crypto trader, told Bitnation,
Paxful made it easy to use crypto despite the CBN’s ban. But the company’s closure leaves me concerned about the future of cryptocurrency in Nigeria and the world at large.
Most crypto users are concerned about getting their funds back following Paxful’s announcement on Tuesday. However, Paxful’s CEO, Ray Youssef, reassured users in a tweet that the company was working to clear users’ send-outs.