Paxful Says 95 % of Affected Users Have Retrieved Funds, Directs Remaining Withdrawals to Website

The statement, posted on October 30, 2025, follows a wave of account closures that began earlier this month after Paxful identified activity that violated its terms of service. While the company did not disclose the exact nature of the violations, it confirmed that all affected accounts were locked to protect the integrity of the platform and its users. Those with remaining balances were given a limited window to claim their funds.

“Users with a balance can log in at paxful.com to withdraw,” the announcement read. “Withdrawals from banned accounts are only available via the Paxful website, NOT through the app.” The message also warned that any attempts to use the mobile application for withdrawals would be rejected, a precaution meant to prevent further complications.

The move comes at a time when the broader crypto ecosystem is tightening compliance measures after a series of high‑profile regulatory crackdowns. Paxful, which facilitates over $1 billion in monthly peer‑to‑peer trades, has faced scrutiny over its onboarding processes and the risk of illicit activity on its platform. By swiftly disabling the app for banned accounts and channeling withdrawals through a single, controlled web interface, the company aims to mitigate potential fraud and ensure a transparent exit path for users.

The 95 % completion rate is relatively high for a forced withdrawal scenario. “When exchanges or P2P platforms freeze accounts, users often experience prolonged delays,” said Maya Patel, a blockchain analyst at CoinDesk. “Paxful’s ability to move the majority of funds out within a short timeframe suggests they have robust internal processes, but the remaining 5 % could indicate technical bottlenecks or users who missed the notification window.”

The announcement also included a practical note for users struggling with 2FA or other login hurdles: “Please submit a support ticket through the chat widget on our website. Our team will guide you through the process.” This guidance underscores Paxful’s effort to provide a clear remediation path, even as it phases out access to its mobile app for the affected accounts.

While Paxful operates a hybrid model—offering a centralized user interface atop a decentralized network of peer traders—the recent bans highlight the challenges of balancing user convenience with regulatory compliance.

For traders who rely on Paxful’s extensive network of over 300 payment methods, the temporary loss of app functionality may prompt a shift toward alternative P2P services or more decentralized solutions that grant users greater control over their private keys. Nonetheless, the swift withdrawal process may help preserve confidence among the platform’s broader user base, which continues to grow amid a resurgence of interest in peer‑to‑peer crypto trading.

Source: here