Paxful, a New York-based peer-to-peer cryptocurrency exchange, has announced it will no longer support Ethereum trades on its platform starting December 22. Ray Youssef, the CEO of the company, cited several reasons for the move, including the increased centralization of the network and a shift to a new consensus mechanism. Youssef also suggested that many tokens created on top of Ethereum were likely scams.
P2P Exchange Paxful Drops Ethereum
Paxful, a peer-to-peer crypto exchange based in the United States, has revealed that it will be stopping Ethereum trades on its platform. The announcement was made via email and later on social media here. Ray Youssef, the CEO of the company, stated that the Ethereum token has been recently updated and is now a “digital form of fiat.”
Youssef explained that the primary reason for the move is the pivot Ethereum has made, changing from the proof-of-work consensus mechanism employed by Bitcoin to a proof-of-stake system. He emphasized that proof-of-work is the “innovation that makes Bitcoin the only honest money out there.”
The increased centralization of the network is another factor Youssef cited in his decision. He stated that Ethereum is currently only managed by a few people, and it will eventually turn into a permissioned community.
Scams Reviews
Youssef also discussed tokenization and the way that malicious actors have exploited the Ethereum network. He said:
Scams have taken billions from people through the tokens that Ethereum generated.
The CEO of Paxful also noted that the exchange will always do “the right thing”, even if that means incurring costs.
The statement garnered mixed reactions, with some questioning the logic behind the decision. When asked if the exchange would move to Bitcoin only, Youssef pointed out that stablecoins issued on Ethereum such as USDC and USDT have real uses and are not completely removed from the network. He also mentioned that 94% of transactions on Paxful are done with stablecoins.
Paxful is one of the exchanges that had stopped offering services to Venezuelan users in September 2020 as a result of US sanctions. The exchange reported trading volumes of $1.1 billion during the first half of 2020.
What do you think about Paxful’s announcement to remove Ethereum from their platform and the reasons for this move? Please leave a comment below.
