The Paxful disaster 🪓
The Paxful disaster 🪓
The dramatic rise and fall of peer-to-peer Bitcoin trading platform. AI won't let you guess wrong, can win you a lottery ticket and sometimes get you all wrong. Robinhood faces $10.2 Million penalty.
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One “horrible divorce” story
Once upon a time, in the bustling streets of New York City, Ray Youssef, a young Egyptian lad with a passion for coding and MMA, met Artur Schaback, a dude from Estonia, at a Bitcoin event in 2014. This encounter led to the birth of Paxful, a peer-to-peer platform that revolutionised Bitcoin transactions using cash or gift cards.
2015. That's a great beginning for the story 🧚 🍿
Their luck took a turn when Visa and Mastercard pulled out from Backpage.com, which was accused of sex trafficking. Paxful rose to the occasion and seized the opportunity. Demand for their services skyrocketed in emerging markets like Nigeria and China, where Bitcoin was seen as a viable alternative to unreliable currencies. Paxful expanded its operations across the world: Estonia, Hong Kong, and Manila.
But, Youssef and Schaback faced internal conflicts and drama. Youssef was arrested twice on suspicion of drug trafficking, and lavish spending and abrupt firing decisions were not uncommon.
One day, Schaback went on paternity leave and everything changed.
Fast forward to now, Paxful closed last week and Youssef, is struggling to develop a plan to reimburse users' funds using his own money in an effort to comply with the law and avoid further legal problems.
And he puts all the blame on Schaback.
And Schaback is taking him to Delaware Chancery Court.
Schaback's POV:
Youssef cut off Schaback's access to company resources and info while he was on paternity leave. And that's not all. Schaback is also claiming that Youssef and his "cohorts" have been looting Paxful's coffers.
He says Youssef attended meetings under the influence of "unspecified substances." The lawsuit even accuses Youssef of trying to pull off an illegal plan to dodge international sanctions on transactions with Russia.
Schaback wants to make Paxful's original vision of empowering the forgotten 4 billion unbanked and underbanked a reality 💪🚀
Youssef's POV:
"The conspiracy theories are madness"
He says Schaback's alleged lack of understanding of his role as COO was clear as day to everyone at the company. Burn!
Youssef even revealed that he took a pay cut during layoffs in 2022 and used his own personal funds to pay engineers to keep the site running after Schaback supposedly refused to pay them, putting customer funds at risk. Youssef's filing in the Delaware court case also claimed that Schaback brought in auditors who turned out to be his friends and lacked qualifications, and one of them even got too intoxicated at a company party and spilled the beans about their true intentions.
2023. Drama, drama, drama 🐉 🍿
Where are we now?
Shutdown 🔒
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TTD AI round-up 🕹️
Midjourney's new feature lets creators upload a picture to craft prompts to generate photos and art. It's called Describe. Now you can't even guess wrong.
Jonathan Turley, a US criminal defense attorney and law professor, claimed that ChatGPT accused him of committing sexual assault. It even made up and cite a Washington Post article to substantiate the claim. What more now, eh?
Patthawikorn Boonin, a Thai national, won close to $60 in a lottery, based on a two-digit number generated by an ChatGPT. Bring on them tickets now.
TTD Number picker 🔢
$10.2 Million
The amount Robinhood is set to pay as penalty from multiple US states over technical failures and investor harm. The investigation found that the platform experienced multiple outages and disruptions, and failed to implement adequate measures to protect investors.
Not the first multi-million dollar penalty for Robinhood
2021 - $30 Million settlement to NYDFS for regulatory violations.
2021 - $70 Million fine by FINRA for failing to protect customers.
2020 - $65 Million payment to US SEC for misleading investors.
TTD Blockquote 🔊
Florida Governor Ron DeSantis ain't no fan of US CBDC
“It is ceding the power of our financial freedom to a central bank which does not have our interests at heart.”
DeSantis has expressed concern over the Federal Reserve's plans to launch a digital dollar. He argued that the digital currency could be used to track people's transactions and limit their financial privacy. It threatens the financial freedom of Americans.
TTD Scammer 💀
A smart contract bug in decentralised exchange SushiSwap has been exploited for $3.3 Million cryptocurrency. The attacker withdrew funds from the exchange's liquidity pools. Steps to mitigate the damage, including disabling the affected smart contract and reimbursing affected users.
South Korean cryptocurrency exchange Gdac has been hacked for $13 Million worth of digital assets. The hack occurred on 22 March and affected its Ethereum, Ripple and Bitcoin holdings. The company said it had suspended all deposits and withdrawals and was working to recover the lost funds.
Robinhood is set to pay a $10.2 Million penalty from multiple US states over technical failures and investor harm. The investigation found that the platform experienced multiple outages and disruptions, and failed to implement adequate measures to protect investors.
TTD Surfer 🏄
MicroStrategy has bought 1,045 Bitcoin for ~ $29.3 Million, average price of $28,016/Bitcoin. It has got the largest holdings by a public company.
As more crypto projects seek non-U.S. jurisdictions, crypto exchange BitGet starts $100M Asia-focused Web3 fund.
High-level diplomats US, Japan, South Korea have expressed deep concerns about North Korea's malicious cyber activities.
Washington D.C. based Cato Institute argues that a United States CBDC, threaten American citizens’ privacy and core freedoms.
Bank of England is building a 30-member team to develop a CBDC. Looking for Digital Pound - Security Architect and Solutions Architect.
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