Traditional crypto exchanges appear to be in the crossfire. In 2022 FTX collapsed within 10 days, and its CEO Sam Bankman-Fried resigned and was eventually arrested. Months later, Binance, the largest centralized crypto exchange, agreed to pay a penalty of $4.3 billion, one of the largest penalties in U.S. corporate history, and the effect is global.
The Philippines Securities and Exchange Commission (SEC) issued a notice on November 28, 2023, that Binance is operating without a license. Filipinos and others around the world are now looking for alternative reliable platforms to buy and sell cryptocurrencies. Longstanding P2P marketplace Paxful has been especially popular with some former Binance users, especially those in Southeast Asia and Africa.
Regulators had warned that the crypto exchange did not have the authority to sell securities or promote crypto trading on social media, leading to the shutdown of all Binance services in the region. From January to September, the exchange’s monthly spot volumes declined by over 70%.
Furthermore, under extended security issuance laws used to prosecute Binance, the government can also prosecute any entity promoting Binance services online or offline under Section 73 of the SRC. Criminals will have to pay a fine of up to 5 million Philippine pesos ($90,000) or 21 years imprisonment or both. The SEC has requested help from the National Telecommunication Commission and asked Google and Meta to stop online advertisements from Binance.
Binance P2P Alternative Paxful trending in Philippines
Serving as a critical on-ramp to crypto for jurisdictions where crypto or modern banking services may be more difficult to access, peer-to-peer (P2P) marketplaces have been a hit across Africa, Asia, and Latin America – especially in countries like Nigeria, Argentina, and indeed, the Philippines. Binance was proving to be a common choice among centralized and P2P traders alike in the Philippines, until the exchange was banned in November.
Founded in 2015, Paxful is the longest-running P2P crypto marketplace, offering users a way to buy, sell, and trade digital currencies like Bitcoin (BTC) and Tether (USDT) amongst one another. The company also offers a free, easy-to-use crypto wallet, and moderates all P2P transactions for safety, security, with managed escrow.
Functioning almost like a “cryptocurrency eBay” of traders swapping gift cards, bank wires, or using +350 other on-ramp methods to get access to a handful of the most widely adopted cryptocurrencies. Now available across 130 countries and reportedly catering to 12 million users, Paxful earned itself a place in the prestigious TIME100 Most Influential Company.
Paxful has seen $2.5 million in new deposits from the Philippines in November, with over 1 million incoming deposits from Binance wallets, with volumes largely moving in Tether and Bitcoin.
The Need For A Stable Marketplace In The Crypto Ecosystem
The collapse of FTX and the recent Binance saga have been a major dent in the crypto success story. But people must know that not all crypto exchanges resort to malpractices. There are stable platforms that abide by the laws and conduct fair business in a true P2P model that connects real users globally.
In the case of Paxful, newly appointed Paxful CEO, Roshan Dharia, has led from the front with a new governance-leadership structure to resolve pending legal issues. It is already giving dividends as Paxful has recorded a 20% month-on-month growth in transaction volume and active users since May 2023. The marketplace has also set a weekly record by achieving 800% revenue growth in just four months.
Paxful offers a user-friendly trading experience with 24/7 customer support and crypto education to newcomers. Its intuitive interface and user products now provide a platform for monthly transactions of millions of dollars with nearly 3,000 BTC in institutional custody assets.
The Binance incident is an important reminder for crypto platforms to embrace fair trading practices and comply with national/global legislation. This boosts customer confidence and helps drive mass adoption. Companies that follow a robust compliance regime and maintain a healthy balance sheet play an important role in the crypto industry, providing a platform to build a holistic crypto ecosystem based on trust, security, and accountability.