Why Nigeria is Hit Harder than the Rest of the World by Paxful Shutdown: Explained

Introduction

The recent shutdown of Paxful, a peer-to-peer (P2P) cryptocurrency marketplace, has left its global community heartbroken. However, it has significantly impacted the Nigerian crypto community where Paxful pioneered P2P crypto use.

Reasons for Shutdown

On April 4th, Paxful announced that it would halt its operations due to “key staff departures” and the regulatory environment, according to the founder and CEO Ray Youssef’s blog.

Nigeria’s Crypto Adoption and Usage

According to “The 2020 Geography of Cryptocurrency Report” by Chainalysis, Nigeria ranked eighth in crypto adoption and usage among 154 countries included in the study. Acceptance and usage of crypto in Nigeria were not as high until Paxful pioneered the use of P2P technology in the country, helping expand the crypto industry.

Impact on Nigerian Crypto Users

A Nigerian crypto user, Emmanuel Susegh, told Cointelegraph that the shutdown of Paxful feels like “the death of a loved one,” as the exchange helped him make his first $100,000. Susegh went on to say that Paxful was the go-to platform he used to trade gift cards from Amazon and Apple for Bitcoin as far back as 2015.

Another member of the Paxful Nigerian community, data analyst Obinna Uzoije, mentioned that in the early days of his career, he used Paxful to exchange the dollars he received from his employers as pay for naira. Freelancers in Nigeria who work for international companies at some point were paid through Skrill, an online payment platform. The funds were accepted by certain users on Paxful who accept those forms of payment, and so the freelancers could easily exchange it, either for Bitcoin or receive direct cash. Uzoije explained that this shutdown leaves a lot of other crypto enthusiasts in Nigeria wondering what the future holds for crypto marketplaces.

Over-the-counter (OTC) vendor Akeem Abdullahi expressed that a generation of OTC vendors was created by Paxful’s escrow service. The vendors could buy gift cards from individuals who wanted to sell and were not literate enough to use the platform.

Users’ Funds

Some community members took to Twitter to express their worry about users getting their funds back. However, Youssef has assured users in a tweet that the Paxful team is working on clearing users’ send-outs.

Conclusion

The shutdown of Paxful has affected the Nigerian crypto community significantly, and it has left many users searching for alternative platforms. The impact of Paxful’s closure on the crypto industry in Nigeria remains to be seen.