Paxful, a peer-to-peer bitcoin exchange, has announced that it will reimburse all users affected by the Paxful Earn program, which was set up in partnership with cryptocurrency lender Celsius. The program allowed users to earn a return on their Bitcoin, but following Celsius’ bankruptcy, users could no longer access their funds and withdrawals were blocked.
Thus, Paxful has decided to take matters into its own hands by reimbursing the users concerned, even if the total sum has not yet been communicated. Paxful CEO Ray Youssef said the court ruling that ruled Celsius’ Earn Program funds as belonging to the company and not its depositors didn’t seem fair to him.
Therefore, the cryptocurrency industry needed to be more transparent and put itself above profit. That’s why he decided to lead by example by reimbursing customers and users of the Paxful Earn program.
Celsius, which had frozen all withdrawals in June 2022 when Bitcoin’s price fell below $20,000, declared bankruptcy soon after and paid only a small portion of its creditors. Bankruptcy proceedings are still ongoing and a recent settlement plan resulted in account holders recovering just over 72% of their cryptocurrency holdings.
According to the latest crypto news we have in our possession, Ray Youssef incidentally announced on Twitter that the funds would be available in the wallets of Paxful users in the coming days and that he was personally responsible for refunding affected users.
He also added that Paxful’s priority is always to safeguard the interests of its users and that the company has put in place various initiatives to support them, such as encouraging people to personally keep their bitcoins.
In sum, Paxful’s decision to reimburse users affected by Celsius’ bankruptcy is a welcome move in an industry that faces significant trust and transparency challenges.
It also shows that crypto businesses need to be more transparent and put user protection before profit. Celsius’ bankruptcy proceedings continue, but all Paxful users affected by the situation can expect their money back shortly.
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