Weeks after Nigerians began complaining about challenges crypto exchange site, Paxful, a non-governmental organization has tabled the issue before Nigeria’s anti-fraud agency, the EFCC.
Last month, we reported that Paxful users in Nigeria were facing serious challenges that began that month. According to several complaints, the Nigerian users of the platform were being suspend or not allowed access to their cryptocurrency wallets.
The issue caused serious distress particularly because Paxful is one of the oldest and, seemingly, more trustworthy crypto platforms used by Nigerians. But with the challenges witnessed in March, Nigerians began to trend #PaxfulIsAScam to share the grievances.
However we dug deep and discovered that a recent change in Paxful’s verification system had triggered the problems users were facing. And from a post on their website, Paxful was aware of the problem and claimed to be fixing it.
Ever since then though, there’s not been any progress report and users have remained blocked from accessing their crypto assets.
But now, a Nigerian civil society group, United Global Resolve for Peace (UGRP), has stepped into the matter. The UGRP has written a petition to the Economic and Financial Crimes Commission (EFCC), alleging that Paxful has defrauded thousands of Nigerian users.
“A few days ago, our organisation was approached by some Nigerians who complained bitterly that Paxful Incorporated… has been ripping them of their life investment in cryptocurrency. It has been 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 UGRP says.
UGRP alleges that Paxful usually blocks users from their accounts and later promises to reopen them following an investigation.
But at the end of the investigation, it “always comes out to say the vendor [user] has done nothing wrong and thereafter release their accounts [but] without the funds in it.”
UGRP names one victim, Samuel Olarenwaju, who says he lost around $60,000 worth of Bitcoin when Paxful suspended his account. According to Samuel, the challenge at Paxful did not start last month. Paxful has been blocking Nigerians since November 2018, he says.
“We have about three million Nigerians trading on Paxful platform and they accounted for 40 per cent of its revenue. Despite this, the company was always referring to Nigerians as scammer,” Samuel says.
Paxful on its part has claimed innocence. According to the platform, there’s always an explanation for accounts that are shutdown. “We will not shut down any account unless they violate our Terms of Service,” it said.
Meanwhile the EFCC has confirmed the petition and an investigation into the Estonian-based company may start soon. This is the first time Nigeria would investigate a cryptocurrency platform accused of fraud.
The move could prove quite decisive though and it could lead to further investigation of other platforms. Regardless, the investigation would help to protect Nigerians from any further abuses and fraudulent practices by these crypto platforms.