While some executives chose to double down on ensuring the security of funds on their platforms, Ray Youssef, CEO of crypto exchange Paxful, backed the idea of self-custody.
Case For Self-custody
The case for self-custody strengthens as investors demand proof of their assets on crypto exchanges. While some CEOs chose to double down on ensuring the security of their platforms’ funds, Ray Youssef, the CEO of crypto exchange Paxful, sided with the idea of self-custody as he assumed responsibility for over 11 million users.
The demise of FTX was a wake-up call for investors who had previously relied on crypto exchanges to protect their assets. However, FTX CEO Sam Bankman-Fried betrayed this trust by misappropriating user funds through Alameda Research. Since then, numerous exchanges have been forced to publicly share wallet information as proof of reserves.
Youssef distanced himself from “others in the industry” in a Twitter post, stating that he never touched investors’ money. He added that;
“My sole responsibility is to help and serve you. That’s why today I’m messaging all of our [Paxful] users to move your Bitcoin to self-custody. You should not keep your saving on Paxful, or any exchange, and only keep what you trade here.”
Crypto Exchange Advisory
Youssef will send weekly emails to users strongly advising against storing cryptocurrencies on all crypto exchanges, including Paxful. The entrepreneur further highlighted the problem with trusting custodians such as SBF, stating that “you’re at the mercy of […] their morals.”
Bitcoin, as an asset, is protected from centralized control and manipulation thanks to Satoshi Nakamoto. Youssef emphasized the unique opportunity that Bitcoin provides — “the chance to finally be in control.”
While he strongly advised users to take complete control of their assets, Youssef assured investors that their funds would be safe if they chose to store their Bitcoin on Paxful. Furthermore, the entrepreneur intends to remove Ether as a tradable asset from Paxful, citing a lack of integrity in comparison to the Bitcoin ecosystem.
The decision to remove Ether from Paxful was made after Jeremy Garcia, the founder and CEO of Satoshi’s Journal, pointed out Ethereum’s poorly designed protocol. SBF made headlines after revealing his plan to launch a new company to repay FTX investors.
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