Paxful, a peer-to-peer Bitcoin (BTC) marketplace based in Tallinn Estonia, has been alleged of defrauding Nigerians trading millions of dollars on the cryptocurrency platform.
The accounts of some Nigerians containing multi-millions of dollars were allegedly suspended or closed down, preventing them from accessing their hard earned wealth in their online wallets.
In a petition filled by United Global Resolve for Peace, a Non-Governmental Organisation, to the Central Bank of Nigeria, the Economic and Financial Crimes Commission, and some other concerned government operatives, it was declared that many a number of accounts were suspended, denying owners the opportunity to access their accounts.
The filed petition, dated April 2, 2019, and signed by UGRP Executive Director, Shalom Olaseni, mentioned that the illegal actions were put in place even though it is clear to the firm that they were not at any time involved in any fraudulent activity.
The petition reads: “A few days ago, our organisation was approached by some Nigerians who complained bitterly that Paxful Incorporated, the company that owns the online cryptocurrency trading and exchange platform, ‘https://paxful.com’ has been ripping them of their life investment in cryptocurrency by suspending their accounts, deactivating their wallets and refusing to return the value in their accounts to them even after investigation and finding that they were not involved in any fraudulent activities.”
“The respondent has, through willful disregard for contract and rules of commercial transaction, done a lot to rob Nigerians of their hard-earned money by its unrestrained activities of blocking their accounts and stating that investigation will be conducted.”
“At the end of the investigation, the respondent always comes out to say the vendor has done nothing wrong and thereafter release their accounts without the funds in it.”
40% of Paxful income Comes From Nigeria
According to the petition, nothing less than $20 million profit was made by the firm in 2018, with Nigerian users adding nothing less than 40% of the revenue. On Paxful, Nigerian users trade Bitcoin, Ethereum, Litecoin and some other cryptocurrency.
Taiwo, one of those allegedly defrauded, has around $10,000 worth of BTC in his account as at November 2018.
Another victim Samuel Olanrewaju, who was interviewed by Punch, a Nigerian Newspaper, on Friday, said his wallet contained $60,000 worth of Bitcoin.
The trader said the cryptocurrency platform accused him of creating a force account on the internets.
“We have about three million Nigerians trading on Paxful platform and they accounted for 40 per cent of its revenue. Despite this, the leadership of the firm was always referring to Nigerians as scammers. I once challenged the Managing Director, Ray Youssef, for referring to us as scammers on an online forum.”
He added: Paxful allowed all kinds of illegal trading because it was making profit from them. They even allowed Nigerians and other nationals to sell iTunes and Walmart cards in spite of the fact that these cards cannot be exchanged in Nigeria.”
An email statement from the firm stated that “All accounts that have been shut down have a reason for it. We will not shut down any account unless they violate our TOS (Terms of Service).”
Meanwhile, EFFC, an anti-graft body in Nigeria has said it received the petition, and has started an investigation on the issue.
Paxful May Loose Nigerian Users
A Lagos based Financial expert, Wale Adetunji, has told Today’s Gazette that it is possible Nigerian government take a bold step that may not be favourable to Paxful, basing his assertion on the fact that Bitcoin may be used in money laundering, an illegal activity in the country.