I came across Paxful months ago while thinking about site monetization. One of the reasons I was impressed with the site was the many payment options available for users.
Another was the simple user interface that gives you the impression that you do not need a guide around the site.
Paxful seemed to be the coin trader’s dream but there have been so many reports against the fast growing exchange that it is worth taking a close look at what goes on in the platform if you’re a new user or even an old one.
During my search for a good monetization site, I rarely came across the exchange for now obvious reasons. But before we look at them, let us review the platform.
What is paxful?
Paxful is a peer-to-peer bitcoin exchange where users are promised they can buy bitcoins instantly. The exchange has been expanding in recent months because it provides many payment options.
It would be rare for a user not to find an option to use on the exchange. This is why many in countries that have banking restrictions have resorted to using Paxful.
Nevertheless, there have been many scam accusations against Paxful so you would do well to know if your funds are safe using the platform or not.
Arbitrary Account Bans
One of the reports that some users of Paxful gave is that the exchange banned the account of some users for flimsy reasons.
For instance, a user who gave his username as Btcboy stated that the exchange banned his account a day after he had substantial amount of bitcoin deposited.
In a Bitcointalk post he made on January 9, 2019 he wrote,
“I have been doing trades on paxful 7 months. I don’t have any bad reputation!
Yesterday I loaded big funds in my wallet. Today without any reason my account banned!!
What the f***. I contact support immediately! They would not respond. After one hour they told me that I used bad language!!”
Considering the allegation, the exchange in essence stole the trader’s money because they adjudged him to have used a foul language.
This is beyond intimidation but a ploy to steal which may be a representation of the company’s policy. Why is it so? The fact is that there are seemingly legitimate online companies that are set up by people who do not have reputation.
Our investigation points to the suspicion that the owners of Paxful regularly apply unethical practices in running the exchange. This is the reason of so many complaints against the platform.
Diversion of Clients’ Payments
There are some reports that seem out of place in an exchange as big as Paxful.
Nevertheless, since there have been several of these, it is of essence that users of the exchange that have not had this experience bear in mind that they are happening.
Being forewarned makes you prepared to accost the situation if it arises.
Several users of Paxful have reported that they made a trade deal with other users but when the buyer or seller sent bitcoin to their addresses, the coins were diverted to other addresses.
June Chronick relayed his experience of payment diversion on the platform:
“I just wanna share my TERRIBLE experience at PAXFUL
I traded my Gift Card for a BTC with a trader in Paxful, it went smooth and I got the BTC, but right after the trade, for just like 3 minutes, my BTC was sent to someone I don’t know and I didn’t even initiated the trade. WHAT THE FLYING FCK. The BTC address is 1KMfvoGyhRAu7xouFB67FZeRKzFWoBpEb6.”
When Paxful admin was contacted to respond to these complaints, they responded that these reports were isolated cases. They stated that users of the platform should have two-factor authentication activated.
The statement from the company stated:
“We are very sorry that this happened to you, please check your login history under account settings security tab. If you are using same password over multiple websites, it is possible that some other website database was compromised where you had registered before and used same email/password combination on Paxful.
We are not interested of scamming our users, we are in bitcoin long run as we love it so much. We care about security of our users and always tell to secure their account with 2-factor to protect bitcoin.”
Paxful Randomly Targeting Accounts?
Some of the users that have experienced losses at Paxful are accusing the platform of culpability in these thefts. Some of them said that the exchange was responsible for the losses and are randomly targeting accounts to steal from.
Even though there is no evidence that the company is directly involved in stealing customers’ funds, we do not dispute the possibility that these losses are insider jobs.
Irfan Pak, another user who had a bad experience with Paxful said,
“What I’m now thinking is that, They scam people account itself and when people say that this site is a scam they use to say that
‘You were Not using a 2 factor authentication’ LOL. I was Not using any 2 factor security code on blockchain, Coinbase etc but never scammed like you scam your People.”
A critical look at the reports shows that people at Paxful either log into users accounts to divert their funds of use phishing attacks to accomplish these thefts.
Deductions from User Accounts
Another complaint says that Paxful deduct funds from user account even when a transaction didn’t go through and they had to refund the owner.
Logan Emerson, a trader on the platform wrote about this experience.
“Paxfull never refund my fees if a deal is not completed. I escrow my btc for Neteller but the buyer failed to complete the deal. After I got a refund in my wallet but they deduct fees. This has happened several times, even though this is not my fault.”
Are Paxful Accounts Hacked?
Paxful has been creating the impression that hackers are responsible for the losses. This is highly improbable since their emphasis has been on two-factor authentication. There are dozens of other exchanges that the users don’t have such bad experience even without 2FA.
We believe that there is a deliberate attempt to steal from users whose accounts lack 2FA because the company has a scapegoat in hackers. User of Paxful should be aware of the risks associated with it.
There are many individuals with shady characters that set up exchanges for the purpose of stealing from people. Paxful has not proven that it has the will to run an honest exchange.
For a recommended bitcoin investment, check this site which would help you grow your funds through its social investment platform that facilitates copy trading.
If you’ve had an experience with Paxful that you’d like to share, send it through the comment box below.