Paxful, a peer-to-peer (P2P) platform for trading Bitcoin, is suspending its marketplace, according to CEO, Ray Youssef, who announced the suspension in a blog post.

The blog post cited "key staff departures" and "regulatory challenges for the industry," as reasons for the shutdown, but Youssef, during a Twitter space on Tuesday, said the decision to suspend its marketplace was due to a lawsuit brought by his co-founder Artur Schaback, although he did not mention him explicitly neither did he provide details on the lawsuit.

Schaback had filed a lawsuit in the Delaware Chancery Court against Youssef in January 2023, according to a court docket, likely because he was "kicked out of the company" more than a year ago.

The company says it is unsure whether operations will resume, but the Paxful Wallet will remain in operation so customers can retrieve their funds. However, customers are being encouraged to transition to self-custody or use other service providers like Bitcoin payments company Bitnob and the newly created peer-to-peer marketplace, Noones.

Founded in 2015, Paxful became the largest P2P exchange by volume in 2018 and has expanded into Venezuela, Nigeria, and South Africa.