A report by local media outlet Punch alleges that Paxful Inc has been stealing money from its Nigerian clients via their cryptocurrency wallets. The report states that a petition has been filed with the Nigerian financial watchdog. The petition given to the Economic and Financial Crimes Commission (EFCC) outlines in what way Paxful has been stealing from clients in Nigeria. The petition was filed on behalf of the people by a non-profit organization.
The organization has detailed the methods which Paxful has been using to steal millions of dollars from its clients in Nigeria. The practices that Paxful has used were maligned by the UGRP (United Global Reserve for Peace) and stated that it had severe consequences on the Nigerian user base of the company.
The allegation stands as the following:
“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 an investigation and finding that they were not involved in any fraudulent activities.”
and was signed by the executive director of the United Global Reserve for Peace. In it, Paxful is accused of disregarding the rules of commercial transaction willfully. It also alleges that Paxful has been in breach of contract with many people from within its Nigerian user base.
The petition further claims that of the $20 million in profit that Paxful made in 2018, a full 40 percent of those profits had come from its illicit practices with regards to Nigerian clients. Those trades were mainly made with Ethereum, Bitcoin, and Litecoin.
Of of the signatories of the petition, and a former customer of Paxful talked to Punch. Samuel Olanrewaju claims that he had lost access to three Bitcoin since November last year. The reason given for the revocation of his assets was that he had created a fake user profile. He further stated that the company refused to communicate when he had tried to resolve the issue with their support staff.
The acting chairman of the EFCC spoke to Punch regarding the matter. Tony Orilade confirmed that that the petition had been received by the EFCC. He also confirmed that the EFCC would look into all allegations made by the petition.
This news comes after the Nigeria Deposit Insurance Corporation (NDIC) had warned Nigerian citizens about the dangers inherent in using cryptocurrency in the country. In March of 2018, he warned anyone in Nigeria who was thinking of using cryptocurrency about the dangers. He reminded people that it was not regulated by the central bank and as a consequence of that was not insured by the NDIC.
Paxful has responded tot he allegations it is facing in Nigeria with a terse statement. They firmly denied any wrongdoing on their part. That the account and wallet closure were arbitrary has no basis in truth according to an email they sent to Punch. They reiterated with all accounts that were shut down would have a solid reason and backing behind it. That they only close accounts and wallets due to violations of the Terms and Conditions, and for no other reason.
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