The rise of cryptocurrency in Nigeria has been unprecedented. Although a volatile market, it has become one of the biggest methods for many young individuals to make money. The social acceptance of this digital currency has been so immense that 10.34 percent of the country’s population has invested in it, Bitcoin being the most popular. In 2020, the interest of most Nigerians in Bitcoin climaxed, attaining its highest level since 2018. Reports indicated that the trading volume helped the substitution of domestic currencies for virtual currencies in transactions. In fact, statistics identified Nigeria as one of the three countries with the most recorded bitcoin trading globally.
Currently, crypto traders trade their cryptocurrencies via peer-to-peer exchanges which entails a direct buying and selling of cryptocurrencies amongst users without the use of any intermediary. However, one of the biggest peer-to-peer platforms, Paxful, which boasts of about 1.5 million Nigerian users, has announced its intention to shut down its total operations. This news was revealed by the Co-founder and Chief Executive Officer of the platform, Ray Youssef, on Tuesday. He said that the platform would be suspending its operations, noting an uncertainty at any imminence of a return. He added that while he could not divulge the full story, the platform witnessed the departure of some important staff members.
Despite ban, Nigeria still rated 8th in crypto adoption and usage globally.
He also indicated that there were regulatory challenges that had disrupted the growth of the industry, especially in the peer-to-peer industry. The Paxful CEO stated that whilst they were working to resolve these issues, the company has had to take the safest option by letting traders explore self-custody and trade via other platforms. A Crypto focused news website, Decrypt, pointed out that the decision to shut down this platform was as a result of a lawsuit by one of the co-founders, who was suing Youssef and Paxful for being unlawfully dismissed about a year ago.
During a Twitter space, Youssef was quoted to have complained about being sued by a co-founder, stating that he had a lawsuit over his head. Whilst the plaintiff wasn’t explicitly named, reports gather that he was most probably referring to Artur Schaback, who had filed a lawsuit against Youssef in the Delaware Chancery Court in January, on the basis of a court docket which was hosted on CourtConnect. Whilst Cryptocurrency is still restricted across Nigeria, the Geography of Cryptocurrency Report 2020 by Chainalysis insisted that Nigeria was eighth amongst about 154 countries in crypto adoption and usage.
Lagos and Ibadan listed amongst the top 50 crypto hubs for 2022.
Regions in Nigeria like Lagos and Ibadan have also been listed as some of the biggest cryptocurrency hubs across the world by Recap, a crypto accounting service company which provided a list of the top 50 crypto hubs of 2022. Lagos and Ibadan were ranked 14th and 24th respectively. Paxful had been responsible for pioneering the peer-to-peer exchange technology in Nigeria, which further enhanced the expansion of the cryptocurrency industry in Nigeria. Paxful’s CEO, in a previous interview, disclosed that Nigeria was the company’s biggest market with about 1.5 million users from 2015.
With this impending shut down, Paxful joins a host of crypto companies to close down after making numerous promises to customers. This firm gained immense traction in Nigeria, after the Central Bank of Nigeria placed restrictions on transactions of crypto via official channels. As a result of its P2P nature helping traders circumvent the restriction, most crypto traders in the country relied on the platform for their crypto-related demands. The firm disclosed last year that with about $760 million in trade volume, Nigeria was its biggest country.
CBN’s ban heralded the viability of P2P as an option in the crypto market.
On Paxful’s imminent shutdown, Senator Ihenyen, the President of Stakeholders in Blockchain Technology Association of Nigeria who doubles as the General Secretary of Blockchain Industry Coordinating Committee of Nigeria, said that this would negatively affect the Nigerian crypto community. He explained that CBN’s restriction had heralded the viability of P2P as an option in the crypto market and with P2P controlling the big market in the country, this development would definitely impact the crypto space.
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Crypto platform with 1.5m Nigerians shut down. – Paxful suspends it’s operations & raises uncertainty over imminent return. – Express your point of view.
This news serves as a warning to crypto investors and highlights the need for clear regulatory guidelines to protect investors and promote the growth of the crypto industry in Nigeria.
This crypto platform needs to be well monitored and regulated. How will a platform just shutdown just like that , while having a lot of customers. I hope they are able to get their cryptocurrency off the platform.
Majority have gone deep in the cryptocurrency space and it’s not really good. It is all because of this unfortunate and unprecedented scenario that I did not even near investing in the various platforms.
The shutting down of operations of the most widely partronized Crypto platform Paxful by Nigerians will definitely affect the crypto partronizes in country. However, other exchanges will available for peer-to-peer transaction
A crypto platform which consist of many people we’re shut down all crypto user should be careful and not be investing in anyhow platform
I think it is to everyone’s knowledge that the development of the cryptocurrency business in Nigeria was greatly aided by Paxful and it brought about the growth of bitcoin in the country.
This is a devastating news, I’m sure these 1.5m Nigerians have invested alot in these crypto and shutting down all of a sudden simply means they will lose all their investment
The ban on cryptocurrencies in the country really hated the growth and operations of the organization so I don’t blame them as they have closed because they won’t have the capacity anymore and that is sad.
Our government doesn’t know that the world is evolving now towards the usage of cryptocurrencies, do they want us to be behind all the time, this is a bad move and they should work on it as soon as possible.
Crypto platform with 1.5m Nigerians shut down. Government of Nigeria always focus on nothing or something not serious. Cryptocurrency is generally accepted in the world today and why is Nigeria government always kick against it. The people trading with cryptocurrency is doing it with their money not government money. Government should focus on Nigeria problem, please
Truly, Paxful cryptocurrency exchanging platform has made peer-to-peer exchange easier for Nigerians since the ban of cryptocurrency in Nigeria. The shutting of the crypto platform will affect most Nigerians. Anyways, since there are other exchanges, though might not be as promising as Paxful but will still give us the result of p2p exchanges.
This is not first time that this will happen but people just decided that if one door closes another one will open and this has made these fraudster involving in this shady business go on without any refercussion.Most of the people doing crypto business are fraudster and just see the avenue to shoot their shot.