Ray Youssef, the CEO of peer-to-peer marketplace Paxful, announced a shutdown of the crypto marketplace last week. However, the controversies that have followed the development are enormous. 

Although Ray blamed ‘key staff departures’ and regulatory issues in the United States for the closure, an explosive CoinDesk report opened a can of worms by making several allegations against the administration of the defunct company.

Amongst one allegation levelled against Ray Youssef was the use of narcotics during office meetings. However, in an exclusive interview with Technext, Ray Youssef denies the allegations and sheds more light on what happened behind the scenes at Paxful. 

The Problem

The CoinDesk report revealed that there was a serious internal war between the two Paxful co-founders, Ray Youssef, the CEO and Artur Schaback, who was once the COO of the company. Ray corroborates this story in the interview with us. 

He recounts that the most immediate factor that led to Paxful closure was the company engineers’ departure, all because Schaback accused Ray of using operating, compliance and security staff to run a conspiracy and money laundering scheme. 

“As of March 31, the last day of March, Paxful, at the end of business on that day, had almost no engineers in the company. All the engineers basically left, the ones who could actually work on the platform, maintain the platform, security platform. All the security people resigned. We had no compliance and we had no operating staff.”

“He (Schaback) refused to pay their salaries, that’s why they left. We owed $6 million in compliance bills. He even filed in court documents that he thought they were all money laundering operations. He actually put this in court documents.”

What happened after those departures was a series of malfunctions and downtimes, which Ray Youssef says he has been spending 20 hours a day on fixing for the past week, all in a bid for customers to get their money out.

Ray admits that the biggest problem he has been hiding from customers and the media for a while is the feud between him and his cofounder, Artur Schaback. He didn’t want to get public with the issues for private reasons. 

Ray says he should have sued Artur before the latter did, but there’s a reason he didn’t do that. He, however, declined to reveal the details. According to him, Artur Schaback was fired from Paxful a year and a half ago for incompetence. 

“There were a lot of issues. We never published the final report, but he refused to partake in the investigation. We just fired him legally. I didn’t want to humiliate him by putting all that in one place again.”

Although it has now been confirmed that Paxful has a co-founder apart from Ray, On August 23, 2022, Ray tweeted:

“To be clear. I am the founder of Paxful. I have no cofounders. Anyone claiming to be is highly sus. Nor will I ever ask you for bitcoin or ask you to invest.”

The Cannabis allegations 

The Schaback lawsuit also alleges that Ray Youssef attended management meetings under the influence of “unspecified substances” and would use hard drugs in the Paxful office. The Coindesk report also hammered on those charges and said Ray didn’t respond to their questions early.