Ray Youssef, former CEO of Paxful, a popular peer-to-peer cryptocurrency exchange, issued a public warning about his former company.
In a tweet on July 8, Youssef claimed that Paxful had removed the proof of reserves that showed how much cryptocurrency the exchange holds in its wallets.
Youssef wrote in his post:
“I request everyone to stop trading until we know the truth of this matter! This is not financial advice. Interestingly, however, we have always provided full transparency on reserves while I was running the company! It's such a simple thing, folks!”
The Proof of Reserves document is a way for cryptocurrency exchanges to demonstrate that they have sufficient funds to cover their customers' deposits and withdrawals. It also helps prevent fraud, theft or bankruptcy. According to Paxful's help center, the exchange used to post proof of reserve on its website, but the link is no longer available.
Paxful did not respond to Youssef's accusation or explain why it removed the proof of reserves. Founded by Youssef and Artur Schaback in 2015, the exchange claims to have more than 7 million users and support more than 300 payment methods.
*Not investment advice.