Peer-to-peer Bitoin marketplace Paxful plans to refund all Celsius Earn users on its platform next week.
In a statement posted to Twitter on Wednesday, Paxful CEO Ray Youssef vowed to make those users affected by Celsius’ bankruptcy whole.
Paxful had a partnership with Celsius which allowed users to earn yield on their crypto through Celsius Earn accounts. These funds were subsequently stranded after Celsius halted withdrawals and declared bankruptcy last year.
“Paxful, like many others, were paralyzed to act as we could not retrieve funds held by Celsius,” wrote Youssef.
A bankruptcy court then ruled that all Celsius Earn accounts were the property of the Celsius estate, granting the firm rights over some $4.2 billion worth of users crypto. A technicality in Celsius’ terms of use statement saw 600,000 users unknowingly sign away their ownership of their assets.
“This didn’t sit sight with me then, and it still doesn’t sit right with me today. Bitcoin is a tool for wealth preservation, and for many, this was money they depended on for their future,” said Youssef.
Although Celsius has resumed withdrawals for some users with Custody accounts, the fate of those who deposited funds through the widely used Earn platform looks increasingly uncertain. The chances of retrieving deposits made through partnerships with companies like Paxful looks even more grim, according to Youssef.
I want to thank all the @paxful users who kept asking and making noise. They kept asking me to fight for their funds. I can’t win a fight with greedy lawyers so we dug into our own pockets. I may not always answer but I read everything. 🙏🏼
— Ray Youssef (@ray_noOnes) March 29, 2023
Youssef expressed similar sentiments in December, citing “integrity over revenue” as the reason behind the firm’s decision to remove Ethereum from its marketplace and focus solely on Bitcoin.
At the time, he opined that the move would make millions of people safer because Ethereum’s shift to Proof-of-Stake compromised its status as a truly decentralized cryptocurrency.
However, this decision was not as well received by members of the crypto community. Some described the Bitcoin-only approach as predatory, with intermediaries like Paxful at the heart of building payment rails to extract value – something that can be built natively on smart contract platforms.
