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 entrusted their assets to crypto exchanges. However, FTX CEO Sam Bankman-Fried violated this trust by misappropriating user funds through Alameda Research. Since then, numerous exchanges have been required to publicly share wallet information as proof of reserves.
Youssef distanced himself from “others in the industry” in a tweet, stating that he never touched investors’ money and adding:
“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.”
Youssef will send out weekly emails to users strongly advising them not to store their cryptocurrencies on any cryptocurrency exchange, including Paxful. The entrepreneur went on to say that trusting custodians such as SBF puts you “at the mercy of […] their morals.”
Bitcoin, as an asset, is protected from centralised control and manipulation thanks to Satoshi Nakamoto. Youssef emphasised 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 ETH 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, raised concerns about Ethereum’s poorly designed protocol.
SBF made headlines after revealing his plan to launch a new company to repay FTX investors.
“I’d do anything to be able to do that.” And I’m going to try if I can,” the infamous entrepreneur said recently in an interview with the BBC when asked if he’d start a new business to repay FTX users.