Centralized crypto exchanges around the world are still reeling from the fallout of FTX’s collapse. As a result, investors and traders have exercised caution with their funds on these exchanges. The suspension of withdrawals on several crypto platforms further put a bad light on the broader crypto industry. 

Take your crypto off exchanges, including Paxful

Ray Youssef, the founder and CEO of the New York-based peer-to-peer crypto platform Paxful, reiterated the importance of self-custody on 11 December. He stressed that the current climate of FUD in the crypto market has made self-custody the best way to ensure the safety of one’s crypto assets. 

“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.”

Ray Youssef further assured his users that the conduct of Paxful was not like “others in the industry”, meaning that his platform did not use customer funds for lending or any other purposes. The platform is also reportedly working on delisting Ethereum [ETH] soon. 

The need for Proof-of-Reserves

Stakeholders in the crypto industry have developed a distrust for centralized platforms this year. Users are no longer sure about the safety of their funds, since platforms halt withdrawals amid precarious financial situations. This was the case with several platforms, including Celsius, BlockFi, and FTX. 

To address this issue, exchanges have published their Proof-of-Reserves, which outlined the assets held by them. This reassured customers that the platform is indeed solvent and their funds are safe. The need for PoR grew significantly following FTX’s downfall. Paxful revealed its proof-of-reserve back in 2020, and popular exchanges like Binance, ByBit, and Kraken followed suit in 2022.