Crypto Exchange Paxful Delists Ethereum due to Proof-of-Stake Change

Paxful with burning Ethereum logo

Crypto exchange Paxful has delisted Ethereum because of its change to proof-of-stake. In an email sent to Paxful's 11.7 million customers, CEO Ray Youseff explained how Ethereum's switch to PoS made it centralized and threw away one of the few elements separating it from other DeFi chains, which was proof-of-work.

A decision based on risk

Paxful appears to be going to down the Bitcoin Maxi route. By focusing on one blockchain, Paxful can reduce its advertising and operating costs. 

But, cost reduction probably wasn't the key reason for their decision. While it is likely Ethereum does go against the beliefs of the CEO (as the email suggests), they probably would've kept ETH on the platform if the risk was low enough.

The risk with Ethereum is primarily sourced from the SEC, led by Gary Gensler.

Gensler has stated on many occasions that only Bitcoin has the status of commodity. Although, PoW altcoins likely will be safe as well.

If the SEC decides to label Ethereum a security, then it will be subject to a litany of securities laws that stocks must comply with. This outcome would be similar to the ongoing Ripple case against the SEC.

Ethereum would be delisted almost immediately from every major exchange if this news arrived. Many in the space have already seen the writing on the wall and use the term "crypto asset" rather than "cryptocurrency" to describe most altcoins. 

The price of ETH remained neutral at the time of writing this.