Nigeria: Crypto Exchange Paxful Petitioned Against Over Account Closures
Paxful Inc. has been accused of defrauding many Nigerian investors of millions of dollars worth of cryptocurrencies through alleged arbitrary account closures. This is according to Punch on April 7th this year.
The report says that the Nigerian non-profit organization United Global Resolve for Peace (UGRP) filed a petition on April 2nd with the country’s financial watchdog, the Economic and Financial Crimes Commission (EFCC), which outlines Paxful’s Inc.’s alleged malign practices and their impact on its Nigerian client base.
Shalom Olaseni, UGRP executive director signed the petition which alleges that:
“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 petition accuses the company of “willful disregard for contract and rules of commercial transaction” in failing to reactivate access to user funds even after purported investigations were found to be groundless.
The petition also claims that Paxful generated $20 million in profit via the exchange in 2018, with Nigerian customers purported to have provided for 40% of the revenue from trades in Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and other cryptocurrencies.
A reported victim, Samuel Olanrewaju, told Punch that he had lost access to three BTC worth $15,750 as at press time since November 2018, claiming the firm had falsely accused him of creating a fake user profile, and refused to respond to his queries thereafter.
Paxful has however denied that its account and wallet closures have been arbitrary, claiming in an email to Punch 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).”
Tony Orilade, acting EFCC spokesman confirmed with the news outlet that the watchdog had received the petition and would investigate the allegations.