You’re reading the most comprehensive Paxful exchange review you’ll find. Plus, it shares one payment method you should never use. Check it out now. See whether this exchange is safe and trustworthy. Plus, learn 3 precautions for keeping your funds safe while trading at Paxful.
This Paxful.com review has all of the information you need to know to buy bitcoin like a boss. It analyzes Paxful scam reports and the opinion of Reddit community. It also explains important details. By the way, the payment method you should never use on this exchange is discussed in the section dedicated to negative Reddit opinions.
Be confident that you’ve come to the right place because I’ve updated this review in 2021. One important change occurred since 2018. Paxful made ID verification mandatory for US users. Another important change is that Paxful released mobile apps, which is why I’ve added “Paxful App Review” section.
Please keep on reading this Paxful review to find out more important information. By the way, there’s bonus information on this page. That bonus information shows the best way to keep cryptocurrency secure.
Disclosure: this page has affiliate links that may make me money. But the content is objective and trustworthy because it analyzes scam reports and Reddit complaints.
Is Paxful A Scam?
Paxful is a peer-to-peer marketplace for trading bitcoin. In other words, it’s a middleman between buyers and sellers. So it’s an eBay for bitcoin. The important part here is that Paxful doesn’t actually sell any bitcoin: other people do that. Paxful’s website clearly states that fact in its terms of service in all caps letters: “PAXFUL DOES NOT ACT AS A PAYMENT PROCESSOR. ALL LIABILITY FOR SENDING AND RECEIVING PAYMENT AND CONFIRMING THE VALIDITY OF THE TRANSACTIONS LIE BETWEEN THE BUYER AND SELLER.”
Keeping the above in mind, let’s consider Paxful scam reports. Some Paxful users wrote on Reddit, Quora, and Sitejabber that Paxful scammed them. Let’s put this in context: Paxful doesn’t sell cryptocurrency; other people do that. Like I wrote above, it’s an eBay for bitcoin. Considering that, ask yourself: “Are there many scammers on eBay?”
Even if you have optimistic mindset, you probably agree there are many scammers on eBay. Likewise, there are many scammers on Paxful. That’s the problem with all peer-to-peer cryptocurrency marketplaces. For that reason, Paxful’s main competitor LocalBitcoins isn’t much better. Scammers abound there as well.
Paxful Is Real Or Fake?
It’s clear that Paxful is a real business. But it’s not clear whether Paxful scam reports are completely objective. However, many people have Googled “I got scammed on Paxful”. As a matter of fact, it’s one of the related searches on the search results page for “Paxful review“. That indicates that scams are commonplace on Paxful. But that doesn’t necessarily mean that Paxful itself is at fault.
However, some people reported that Paxful froze their accounts. In that case, Paxful was the cause of people’s anger. For example, this Bitcointalk forum thread is a case like that. Here’s what happened: “Same here, they ask me to verify account, and give selfy photo, and many documents. I told them i want to leave Paxful and withdraw my balance but they rejected to give me my balance.” In short, Paxful demanded verification and the user refused. As a result, Paxful refused to return user’s bitcoin. However, as you’ll read below, Paxful was acting within its terms of service.
How Do Paxful.com Terms Of Service Explain The Above Incident?
The above case scenario may seem harsh. But Paxful has terms of service that explain the necessity of verification. The part of Paxful terms of service that explains this follows below.
“During the registration of your account, you agree to provide us with the information we request for the purposes of identity verification and the detection of money laundering, terrorist financing, fraud, or any other financial crime and permit us to keep a record of such information. You will need to complete certain verification procedures before you are permitted to use the Services, which procedures may be modified as a result of information collected about you on an ongoing basis. The information we request may include certain personal information, including, but not limited to, your name, address, telephone number, e-mail address, date of birth, social security number, taxpayer identification number, and a government identification.”
In short, that Bitcointalk user who refused to provide documents was violating Paxful’s terms of service. If he read them before opening a Paxful account, he may have never opened an account but he would’ve saved his bitcoin. Thus, Paxful wasn’t at fault in that particular case and in similar cases. Those users who wrote “I got scammed on Paxful” after similar incidents weren’t scammed. They didn’t follow the terms of service.
Can You Get Scammed On Paxful?
Yes, you can get scammed on Paxful. Many scammers seem to be making a living scamming people on Paxful. However, Paxful is definitely not a scam. It’s a relatively trustworthy business. But Paxful’s business model is open to third party fraud. Therefore, you must be vigilant and follow all the precautions, though Paxful has safety features. These features are explained in the next section. Precautions for keeping your funds safe are also explained in the next section. So please keep on reading this Paxful exchange review for even more useful information.
Is Paxful Legit And Safe?
In this section, I answer this question. I answer it by examining various facts about Paxful bitcoin exchange. And in the end of this section, I give a direct answer to the question you may have Googled: “Is Paxful legit and safe?”
First, I consider whether this exchange is legit. Then, I return to Paxful safety features mentioned above. You’ve already read quite a lot about Paxful scam reports. But there’s still a lot to learn about the question of its legitimacy.
Paxful Age: Not The Oldest Cryptocurrency Exchange In The World
To understand its legitimacy, let’s consider the age of this business. Paxful isn’t the oldest cryptocurrency exchange in the world. That distinction belongs to the defunct exchange called Bitcoinmarket.com; it was founded in 2010. Likewise, the oldest cryptocurrency exchange still in operation today was founded in 2011.
Furthermore, Paxful isn’t the oldest peer-to-peer cryptocurrency exchange still in operation today. That distinction likely belongs to its competitor LocalBitcoins. Nevertheless, Paxful has been operating since 2015. During these six years of operation, there seem to have been zero major scandals that received widespread negative publicity.
Ray Youssef and Artur Schaback founded this cryptocurrency exchange in 2015. They have active social media presence; both are active on Twitter and LinkedIn. Likewise, there are articles about them on legitimate websites. These articles indicate their involvement in Paxful. Thus, it’s likely they’re real people.
Paxful Exchange Review: Press Coverage
This important section of Paxful exchange review covers the press coverage and its online presence. There’s no Paxful Wikipedia page. However, Paxful did receive some press coverage. Crunchbase profile of Paxful lists 77 articles about this company. There are articles about it in major crypto publications, such as Bitcoin.com, Cointelegraph, and CoinDesk. Some of them detail Paxful’s partnerships with other companies. Thus, it’s likely that Paxful is a legitimate company, as it fosters relationships with other businesses to expand crypto adoption worldwide.
2 Most Important, Trustworthy Paxful Safety Features
Paxful’s first most important safety feature is escrow. Paxful locks the funds after the transaction is initiated. These funds are locked until the transaction is complete.
Paxful’s official website states that the escrow feature protects the buyer in the following way: “If you as a buyer make the payment but the seller refuses to release your crypto, the secure escrow serves as a guarantee. The seller’s cryptocurrency will stay in escrow until our moderators step in to investigate the situation and award the cryptocurrency to the deserving party.”
Paxful’s second most important safety feature is two factor authentication. Paxful’s official website rightly states that two factor authentication is “the best way to verify all your logins, transactions, send-outs, and withdrawals.” If you decide to use Paxful or any other crypto exchange, you must use two factor authentication to protect your account.
These two safety features make Paxful somewhat trustworthy, as they show that Paxful does try to protect its users.
Paxful Exchange Review: 3 Precautions For Keeping Your Funds Safe
- To make sure that Paxful moderators will help you, conduct communication with Paxful sellers only through Paxful. Never take communication with them outside of Paxful or the moderators will refuse to help you.
- Never release the payment when the status is pending. The transaction must be confirmed and you must have the full control of the cryptocurrency you purchased.
- Use Paxful’s featured offers because they’re more likely to be legitimate offers. These are highlighted offers. You can see how they look in the featured offers screenshot below.
Is Paxful Legal In The US?
You may have wondered: “Is Paxful legal in the US? Does Paxful work in USA?” The answer to both questions is yes. Paxful is legal in the US and does work in this country. As a matter of fact, Paxful bitcoin marketplace is headquartered in the USA. Its address is 3422 Old Capitol Trail #989, Wilmington, DE.
However, it doesn’t serve the residents of New York, Washington, and West Virginia. If you live in Washington or West Virginia, please check out my BitQuick Review: Is BitQuick Safe?
Is Paxful A Regulated Exchange?
If you wondered: “Is Paxful a regulated exchange?” The answer is no. But it’s not a bad thing. US government doesn’t regulate peer-to-peer bitcoin exchanges like Paxful. This said, it must and does comply with government regulations related to financial transactions.
Is Paxful Legit And Safe? Section Conclusion
Paxful is legit and somewhat safe if you use its safety features and follow the above-mentioned precautions. However, since it’s a peer-to-peer cryptocurrency exchange, there will always be scammers there. For that reason, you should be very careful when trading crypto there.
Paxful Review – Reddit Opinions
In this section, you’re gonna find both negative and positive opinions from Reddit.
Negative Reddit Opinions
There are some Paxful complaints on Reddit. According to some Redditors, moderators can do better. Paxful users have complained about them. According to some Redditors, moderators take at least three days to resolve a dispute; sometimes they take a week. On top of that, they often take the side of a person with lots of positive ratings.
Apparently, it’s pretty easy to fake those positive ratings. At least according to this negative Reddit post, Paxful’s rating system is somewhat unreliable. Some scammers manage to get positive ratings apparently through manipulation.
Another negative thing mentioned on Reddit is high fees. One Redditor has put it the following way: “Paxful has got to be the most expensive way to acquire BTC anywhere. The seller gets a huge cut, you might pay a fee depending on your payment method, and Paxful gets a cut when it comes to you, and when you want to withdraw it.”
Negative Reddit Opinion: Paxful PayPal Scams
Paxful is dangerous if you’re using PayPal for two reasons. First, PayPal transactions can be reversed while bitcoin transactions are irreversible. Second, there are scammers running Paxful PayPal scams. Paxful PayPal chargeback scam is one of the most common ones. Multiple Redditors reported it. For these reasons, never use PayPal on Paxful.
As you can see from the quote below, Paxful itself cautions you against using payment methods like PayPal.
“Beware of RISKY Payment Methods! Even if you have received the funds many payment methods can be REVERSED and charged back so you will lose your funds and your bitcoin…”
Instead of PayPal, Paxful advises you to “Use SAFE methods like Western Union, MoneyGram or Bank cash deposit…”. They give such advice because it’s not easy to reverse these payment methods.
Positive Reddit Opinions
There are positive Reddit opinions about Paxful customer support. For example, one Redditor has told a positive story about his interaction with Paxful customer support. It follows below.
“Paxful is a relatively safe place to do peer-to-peer bitcoin trading. Not because there are no scammers, but because their customer support is responsive and trade moderators are really good with their job. I once entered into a trade chat with a phisher and reported to the support team. Moderator was swift to confirm that the link was a phishing site and immediately suspended the trader.”
Reddit Section Conclusion
Reddit opinions about Paxful are mixed. However, it’s clear that there are many scammers on Paxful. This said, it seems that Paxful customer support may have gotten better. It’s a possibility because the negative Reddit post that criticizes Paxful customer support is five years old, while the positive one is three years old.
Paxful Exchange Review: Advantages
Paxful does have some advantages, but it used to have more advantages in 2018.
What Changed At Paxful Exchange From 2018 To 2021
When I wrote the first version of this review in 2018, Paxful had more advantages. Back then, you could use Paxful exchange to buy bitcoin without verification; ID wasn’t required. That changed. Now every single purchase requires verification. For that reason, I’ve had to remove two of its advantages: 1) no verification; 2) less government intrusion.
Advantage #1: Easy-To-Use Interface
Paxful has easy-to-use interface. Many people agree that Paxful is one of the easiest bitcoin exchanges. Plus, its design is intuitive and the website works fast. Furthermore, Paxful.com has comprehensive FAQ section that answers many common questions. So it should be easy for anyone to use Paxful.com. But it’s not the only advantage. There’s another advantage you’re gonna find in the next section of this Paxful.com review.
Advantage #2: Big Number Of Payment Methods
Paxful offers more than 350 payment methods. Most exchanges have only a few options. Multitude of payment methods seems convenient. But most people (at least in Western countries) don’t need them.
Main Disadvantage: High Prices Of Paxful Offers
Paxful offers have prices that are higher than average market price. These prices have nothing to do with Paxful management. Each bitcoin seller on Paxful can set any price he wants. So if you decide to use Paxful to buy bitcoin, you should find Paxful seller that has the best combination of low price and safe payment methods.
There are four levels of Paxful verification. First level requires only email and phone; it allows trading for up to $1,000. Second level requires ID and has a trading limit of $10,000. Third level requires an address and has a trading limit of $50,000. Fourth level requires enhanced due diligence and has no trading limit.
The first three levels of verification are mandatory for all US users. They’re also mandatory for the residents of Canada and European Union who want to use all of Paxful’s features.
Paxful ID verification time is usually less than one day. However, some users have to wait for manual verification. Manual verification takes between three and ten days.
Paxful App Review
This Paxful exchange review would be incomplete without a brief overview of Paxful apps.
Paxful offers an iOS app and an Android app. Each of these apps has a rating of slightly less than four stars. That rating is less than that of another cryptocurrency exchange app I’ve reviewed in CEX.IO iOS App For iPhone Review.
Paxful claims that “ID and address verification can be done in just a few hours” if you use its mobile app. While that claim may be true, you should be sceptical about its low fees claim. You shouldn’t believe that “there are no fees at all”. As I’ve already explained above, Paxful offers have high prices. Sellers can charge anything they want.
Occasionally high prices isn’t the only problem. Another common complaint against Paxful app is verification. One star reviews from the summer of 2021 frequently mention problems with verification.
Many scam complaints in Paxful app reviews mention gift cards. One user summarized this issue the following way: “Gift Cards Buyers Mostly Scammers”. To avoid them, avoid gift cards when using Paxful apps.
Do you think this Paxful app review has useful information? If yes, please share this page to social media now because that would help others understand the nuances of Paxful crypto trading.
What Cryptocurrencies Are Available On Paxful?
There are three cryptocurrencies available on Paxful. They’re Bitcoin (BTC), Ethereum (ETH), and Tether (USDT). You can these cryptocurrencies on other crypto exchanges to buy other cryptocurrencies. Almost all altcoins can be exchanged for one of these three cryptocurrencies.
Useful Bonus Information: Secure Your Cryptocurrency
Online wallets are insecure because they’re connected to the Internet. Paxful wallet is an online wallet. Therefore, you shouldn’t rely on it to store big amounts of crypto. Instead, transfer your cryptocurrency to a hardware wallet. Cryptocurrency experts recommend hardware wallets as the safest crypto wallets. If you don’t have a hardware wallet, please check out the best hardware wallet right now. You’ll be surprised by how affordable this wallet is.
Conclusion Of This Paxful Exchange Review
|Ease Of Use|
Though you’ve read this Paxful exchange review, you may be asking yourself: “Should I use Paxful or not?” Well, that depends on your priorities. If you value ease of use and a variety of payment methods, it’s a good choice. It’s an especially good choice if you want to pay with a less popular payment method because most exchanges accept only cards and bank transfers. Plus, overall, Paxful is a decent peer-to-peer crypto exchange. You may want to try it today.
If you prefer not to open Paxful account, please check out my list of Paxful alternatives now because they’re good.
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