Paxful CEO promotes self-custody, warns users to stay away from CEXes

• CEO and co-founder of Paxful, Ray Youssef, working on delisting CEXes from the platform
• CEXes have had a bad year and multiple crypto firms have collapsed

Centralized crypto exchanges around the world are still reeling from the fallout of FTX’s collapse. As a result, investors and traders have exercised caution with their funds on these exchanges. The suspension of withdrawals on several crypto platforms further put a bad light on the broader crypto industry. 

Take your crypto off exchanges, including Paxful

Ray Youssef, the founder and CEO of the New York-based peer-to-peer crypto platform Paxful, reiterated the importance of self-custody on 11 December. He stressed that the current climate of FUD in the crypto market has made self-custody the best way to ensure the safety of one’s crypto assets. 

Will be sending an email every week strongly advising our people to never keep savings on any exchange, including @paxful This is the way ! Self custody your savings ALWAYS! pic.twitter.com/DI95Gaa5Y6

— Ray Youssef (@raypaxful) December 11, 2022

Paxful’s chief did not count out his own platform while asking users to be careful and move their Bitcoin [BTC] off exchanges. He said, 

“My sole responsibility is to help and serve you. That’s why today I’m messaging all of our [Paxful] users to move your Bitcoin to self-custody. You should not keep your saving on Paxful, or any exchange, and only keep what you trade here.”

Ray Youssef further assured his users that the conduct of Paxful was not like “others in the industry”, meaning that his platform did not use customer funds for lending or any other purposes. The platform is also reportedly working on delisting Ethereum [ETH] soon. 

The need for Proof-of-Reserves

Stakeholders in the crypto industry have developed a distrust for centralized platforms this year. Users are no longer sure about the safety of their funds, since platforms halt withdrawals amid precarious financial situations. This was the case with several platforms, including Celsius, BlockFi, and FTX. 

To address this issue, exchanges have published their Proof-of-Reserves, which outlined the assets held by them. This reassured customers that the platform is indeed solvent and their funds are safe. The need for PoR grew significantly following FTX’s downfall. Paxful revealed its proof-of-reserve back in 2020, and popular exchanges like Binance, ByBit, and Kraken followed suit in 2022. 

We have had proof of reserves since 2020 but that is never enough, no where near. Every exchange must make maximum effort to protect their customers money and the ONLy way to do that is self custody. Bitcoin fixes this.

— Ray Youssef (@raypaxful) December 11, 2022