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In the words of Ray Youssef, “Paxful, like many others, were paralyzed to act as we could not retrieve funds held by Celsius…. This didn’t sit right with me then, and it still doesn’t sit right with me today. I’ve personally taken action and will be refunding all affected Paxful users”
Peer-to-peer trading platform Paxful announced its plans to return the assets of Earn account holders whose funds were frozen following Celsius’ bankruptcy.
In 2021, Paxful launched its yield-bearing product, Paxful Earn, in partnership with Celsius Network. However, Celsius filed for chapter 11 bankruptcy protection in 2022, causing Paxful’s Earn users to lose access to the funds locked on Celsius’ platform.
Although Celsius has initiated refunds, the bankrupt lender only allowed a fraction of its clients to withdraw their assets. Moreover, Judge Martin Glenn recently ruled that Celsius’ Earn accounts belong to the company, and not its clients.
We have done the right thing and refunded @paxful users who lost funds with Celsius Earn. I could not stand by and watch them suffer, so we’ve made them whole. Our users always come first to me, this is the way ! 🧡😇 pic.twitter.com/aQox7qspOh
— Ray Youssef (@raypaxful) March 29, 2023
Referring to these developments, Paxful CEO Ray Youssef tweeted that the firm will return $250K to the affected users. According to the email sent to holders of Paxful Earn accounts, the firm will send user deposits locked on Celsius to their Paxful Wallets later this week.
Youssef said this venture cost him 8.8 Bitcoin (BTC) tokens. The CEO of Paxful also advised users to keep their funds in self-custodial wallets, adding,
“I hope that everyone takes their funds and self custodies. Do not keep any funds on Paxful unless you will trade them right away.”