Ray Youssef: My promise to make Paxful users whole through a public trust.
Transparency is one of the core tenets of bitcoin. In honor of this ideal, I want to be as transparent as I can be around what’s happening behind the scenes at Paxful.
Currently, my co-founder and I are in a deadlock around the direction of the company. Given his track record, I do not trust him to have access to or control over user funds. We agreed to have Srinivas Raju, of Richards, Layton, and Finger (appointed by court order) to be the custodian of Paxful through this process. As custodian, Srini has full authority and control of the company, its operations, and its management. Over the next month, Srini will try to help stabilize Paxful while preparing a recommendation to the court regarding how the business should proceed. Srini is considering all possible recommendations for Paxful’s future as a business.
While I am resigning as CEO, my priority will continue to be the resolution of frozen user funds and the reliability of the Paxful Wallet.
User funds: Over the weekend, I was able to unfreeze 88% of the frozen user funds. Now, only about 3.3% of total customer funds remain on the Paxful Wallet, a sum of just under $4.5M.
I brought a deal to my co-founder in a good faith effort to close this chapter, asking him to buy all of my shares in Paxful for one satoshi — if he promised to do the compliance work necessary to unfreeze the remaining accounts. He refused. This shows you the absolute lack of concern for our users that I’ve been up against.
That deal is now off the table and I have a new plan to make things right that does not require his approval. I will put 99.9% of my personal shares in Paxful, which accounts for over 45% of the company, into a public trust. The funds generated by my shares will be used to make every Paxful user whole. Anything remaining will go directly towards the Built With Bitcoin Foundation to build schools.
I will not receive one satoshi from the shares in this trust. I will, however, sleep well at night knowing I did the right thing. Contributing my personal shares to the well-being of our users is my way to show that this has truly never been about profit for me, it has and will always be about the people we built Paxful to empower. I am committed to staying true to my word.
The Paxful Wallet: I have prioritized the Paxful Wallet over the Marketplace to ensure that people have access to their funds. It is my goal to keep the wallet up for at least two years, so Paxful can get all frozen funds off the platform and to give users time to retrieve them. Through my public trust, I will still maintain my board vote and will continue to hold Paxful accountable to the users’ best interests.
It is deeply important to me that I close this chapter of my life maintaining the trust I’ve established with the Paxful community. Bitcoin is about righting the wrongs of a broken financial system and I will not allow my time with Paxful to end without offering full transparency through this process and without making every effort I can to keep our users out of the crosshairs: something my co-founder does not seem interested in.
I want Paxful to be an example of how a bitcoin company was faced with suffocating U.S. regulations and a greedy and selfish bad actor, but still overcame. We rolled up our sleeves and did whatever it took to make the users we care about whole.
I will keep the community updated around the trust and whatever unfolds next.
Ray
