Paxful Review (Dec 2022): Why We Don’t Like It

June 16, 2022
Reviews

Paxful is a global peer-to-peer crypto exchange that provides users with an intuitive platform to buy, sell, trade, and convert cryptocurrencies. However, because of its extremely limited cryptocurrency support, its complete lack of advanced trading features and order types, and because of its high fees and spreads, I'd be hesitant to recommend this platform as a top crypto exchange option for Canadians to use.

Instead, I recommend CoinSmart, Bitbuy or Newton since they all offer more features and charge lower fees than Paxful. For the best possible crypto trading experience, you can’t go wrong with any of these three platforms.

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What Is Paxful?

Paxful is a global peer-to-peer crypto exchange that provides users with an effective way of buying, selling, trading, and converting crypto tokens. The exchange was founded in 2015 by a team of developers that wanted to simplify the Bitcoin purchase and sale process, and it is currently headquartered in New York, U.S.A.

The exchange currently supports three different crypto tokens, and it is used by over 6 million people around the world. Additionally, it has some interesting features, such as offering a free Bitcoin wallet to its users and allowing them to exchange gift cards that they don't use for Bitcoin, Ethereum or Tether instantaneously.

To start off this Paxful review, let’s take a deeper look at Paxful’s pros, cons and features.

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Paxful Pros & Cons

Paxful Pros

  • Extremely beginner-friendly.
  • Wide variety of supported payment methods.
  • You can use it to convert gift cards into Bitcoin instantly.
  • Has a user feedback system that helps you identify trusted and experienced peers to trade with.
  • Grants users a free Bitcoin wallet (provided by BitGo).
  • You can exchange any goods and services (including cars, gold, groceries, and appliances) for Bitcoin.
  • Responsive support.

Paxful Cons

  • Only supports three different crypto tokens (Bitcoin, Ethereum, and Tether).
  • Has no advanced trading features or charting.
  • Its mobile app is not well-rated.
  • Surprising lack of regulation in the territories where it operates.
  • High fees and spreads (1%).

Paxful Features

1. Paxful Desktop Platform

Paxful's desktop platform is extremely simple to use, and it's an ideal platform to use for traders who are just getting started with cryptocurrency investing in general. You can create a new account in as little as a minute, and at the top left corner, you'll have the option to either buy or sell Bitcoin, Ethereum, and/or Tether. You'll also be able to do so through a huge array of 350 different supported payment methods.

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However, Paxful doesn't have an advanced trading platform, any advanced charting tools, or any advanced order types, so you'll be strictly limited to peer-to-peer purchase, sale, trade, and conversion operations only. Considering that the Paxful platform is so barren of features, seasoned crypto investors have almost no use for the platform.

The platform's fees are also somewhat high, and you can expect to pay around 1% for selling crypto and 0.5% for converting it. You can, however, trade these crypto tokens between themselves: considering how many crypto exchanges lack this feature, we have to give credit where it's due.

2. Paxful Mobile App

Paxful also has a slick and intuitive mobile app that will allow you to do all that you can do on the desktop platform. It's the perfect mobile app for beginners in the world of crypto, but considering the Paxful platform lacks a lot of features, you can expect the same from the mobile app: the more advanced crypto traders will, once again, not find much to do here either.

The mobile app is also not very well rated: it has a rating of 3.1 out of 5 stars based on 22,000 reviews on the Google Play Store and 3.6 out of 5 stars based on 2,000 reviews on the Apple Store. Common app critiques include freezing accounts without warning and being unable to upload files for account verification when updating the app, which is shocking.

3. Paxful Security Features

Paxful is somewhat mixed in terms of security. Regulationwise, it's quite alarming, as it's not a registered Money Services Business (MSB) with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), nor is it a registered firm in the Ontario Securities Commission (OSC). Additionally, it doesn't have any regulations in other countries where it operates, and it also doesn't have any insurance for customer funds, so you'll have to use this platform at your own risk.

As for security features, you do have the option to set up 2-factor authentication (2FA) and a biometric facial recognition login that is powered by AI, which is great. However, considering that these features can be disabled, their effectiveness depends entirely on the user. The exchange also doesn't have any cold storage measures considering that its platform is strictly peer-to-peer, so its users are the ones tasked with worrying about their storage options.

4. Paxful Customer Support

Paxful has a pretty extensive FAQ center that will cover the most common inquiries you could have of the platform, and it even has informative definitions for a wide array of crypto terms in case you're just getting started with crypto trading. You can reach the platform through its live chat icon on the bottom right corner, as well as through ticket submission in case you have a complex inquiry. Phone and email support are not available, however.

  • Phone: Not Available
  • Email: Not Available
  • Live chat: Available

Additionally, Paxful has a social media presence, and you'll be able to reach them through pages like Facebook, Twitter, YouTube, and Reddit. Expect the customer support you'll get here to be rudimentary, however, as these channels don't have customer support as the first thing in mind.

5. Paxful Bitcoin Wallet

One neat feature that Paxful provides is its free Bitcoin wallet, and any user will be able to easily store assets that they buy through the platform. The Paxful wallet has been used by 3,000,000 people to both send and receive over 40,000 BTC, making it a pretty successful crypto wallet.

This wallet will be ideal for getting your feet wet with crypto investing overall, and considering just how expensive a crypto hardware wallet can be, it's also a much-appreciated feature to have.

Cryptocurrencies On Paxful

Currently, Paxful only supports three crypto tokens: Bitcoin, Ethereum, and Tether. This is a very limited array of supported cryptocurrencies, so if you're interested in investing in the most popular altcoins (besides Ethereum) or you're interested in investing in rarer crypto tokens before the masses, you'll have to look elsewhere.

Paxful Fees

Trading Fees & Spreads

Paxful's trading fee structure and spread rates are, thankfully, pretty easy to understand. It looks more or less like this:

Payment MethodPurchase FeeSale Fee
Bank TransferFree0.5%
Other Bank TransferFree1%
Credit/Debit CardFree1%
Digital CurrencyFree1%
Online WalletFree1%
Fiat Currencies (Cash)Free1%
Goods & ServicesFree1%
Gift CardFree5% for iTunes and Google Play gift cards
3% for all other gift cards

Additionally, you'll incur other fees for sending and receiving different crypto tokens through the platform. These fees look like this:

1. Sending And Receiving Bitcoin (BTC)

Wallet TypeSend Fees (USD)Receive Fees (USD)
External Wallet$0 – $9.99 = 0.00008 BTC
$10 – $19.99 = 0.00016 BTC
$20 and more = 0.0004 BTC
Free
Internal WalletUp to 1,000 USD per month for free
After the 1,000 USD limit is reached, a fee of 1 USD or 1% of the amount being sent will be applied, depending on which is greater
Free

2. Sending And Receiving Ethereum (ETH)

Wallet TypeSend FeesReceive Fees
External WalletDynamic Ethereum or Tron network fee + Paxful Wallet Fee

Paxful Wallet Fee Breakdown:
$0 – $9.99 = 1 USDT
$10 – $19.99 = 2 USDT
$20 or more = 5 USDT
Free
Internal WalletUp to 1,000 USD per month for free
After the 1,000 USD limit is reached, a fee of 1 USD or 1% of the amount being sent will be applied, depending on which is greater
Free

3. Sending And Receiving Tether (USDT)

Wallet TypeSend FeesReceive Fees
External WalletDynamic Ethereum network fee + Paxful Wallet Fee

Paxful Wallet Fee Breakdown:
$0 – $9.99 = 0.0005 ETH
$10 – $19.99 = 0.001 ETH
$20 or more = 0.002 ETH fee
Free
Internal WalletUp to 1,000 USD per month for free
After the 1,000 USD limit is reached, a fee of 1 USD or 1% of the amount being sent will be applied, depending on which is greater
Free

As you can see, these fees and spread rates are high, especially if you convert gift cards into cryptocurrency instantly. These rates will certainly eat into your investment profits, and you might want to consider alternative crypto exchanges like CoinSmart, Bitbuy, or Newton because of this. Additionally, you can expect to incur a 0.5% fee for converting crypto tokens and a 1% fee for sending funds to your own external wallet, which is a bit nasty.

3 Exchanges I Recommend Over Paxful

Paxful isn’t a bad exchange, but it’s also not the best in Canada: it has a very limited array of supported cryptocurrencies, it is barren of advanced trading features or charting, and its mobile app is very lowly rated. That’s why I recommend any of these three exchanges over Paxful:

  1. ZenGo: With 0% trading fees up to $1,000, best-in-class security, and 24/7 customer support, ZenGo is our #1-rated crypto exchange in Canada. Sign up by December 9, 2022 to open your free account.
  2. VirgoCX: With support for more than 50 cryptocurrencies, instant account verification, and a beautiful website and app, VirgoCX is our #1-rated crypto exchange in Canada. Get your $20 signup bonus with VirgoCX here.
  3. CoinSmart: With trading fees at 0.2%, quick deposits and withdrawals, and strong customer support, CoinSmart is my backup exchange in case I ever need something that VirgoCX can't provide. Get your $50 signup bonus with CoinSmart here.

Here's a quick summary of these three exchanges:

#1 Best Overall

Trading Fees: 0% up to $1,000
Security: Best in class
Customer Support: Excellent

Ultimate security + lowest fees.

★★★★★

Rated 4.9/5

#2 In Canada

Spreads: 0.5% – 1%
Security: 95% cold storage
Signup bonus: $20

Low fees + solid platform.

★★★★★

Rated 4.5/5

Good All-Around

Trading fees: 0.2% (Medium)
Security: 95% cold storage
Signup bonus: $50

Average fees, good platform.

★★★★

Rated 4.4/5

How To Withdraw From Paxful

To withdraw fiat (cash) from Paxful, follow these steps:

  • Log in to your Paxful account.
  • Click the “Wallet” option.
  • Click the “Send option under your Bitcoin wallet.
  • Enter the Bitcoin amount into the “BTC AMOUNT” field.
  • Enter your bank account information.
  • Double-check the transaction details and enter your 2FA code if you have it enabled.

In Summary

Paxful is a global peer-to-peer crypto exchange that provides users with an intuitive platform to buy, sell, trade, and convert cryptocurrencies. However, because of its extremely limited cryptocurrency support, its complete lack of advanced trading features and order types, and because of its high fees and spreads, I'd be hesitant to recommend this platform as a top crypto exchange option for Canadians to use.

Instead, I recommend CoinSmart, Bitbuy or Newton since they all offer more features and charge lower fees than Paxful. For the best possible crypto trading experience, you can’t go wrong with any of these three platforms.

SECURE MY CRYPTO FOR FREE
Sign up by December 9, 2022.

Paxful FAQs

Is Paxful Safe & Secure?

Yes, trading with Paxful is completely safe and secure. It allows you to set up industry-standard security measures to strengthen your account's security, such as 2-factor authentication (2FA) and a biometric facial recognition login.

Is Paxful Legit?

Yes, Paxful is legit for several reasons: it has over 6,000,000 users worldwide, its Bitcoin wallet has been used by over 3,000,000 people to trade over 40,000 Bitcoins, and it has industry-standard security measures like 2FA and biometric login.

Is Paxful Legal In Canada?

Yes, Paxful operates legally in Canada. However, it's not a registered Money Services Business (MSB) with the Financial Transactions and Reports Centre of Canada (FINTRAC), nor is it a registered firm in the Ontario Securities Commission (OSC).

Is Paxful Trustworthy?

Yes, Paxful is a trustworthy exchange for several reasons: it has over 6,000,000 users worldwide, its Bitcoin wallet has been used by over 3,000,000 people to trade over 40,000 Bitcoins, and they have a user feedback system that will allow you to find reputable sellers more easily.

Does Paxful Verify Accounts Instantly?

Yes, Paxful does verify some accounts instantly, though if your account needs to go through the manual verification process for some reason, these are the documents you’ll need to provide:

  • A government-issued ID (e.g. a passport) that is valid, legible, and in colour.
  • An ID photo that includes your face on the document, the document's number, and your full name.

Is Paxful Good For Canadians?

Paxful is a decent exchange for Canadians, though if you’re looking for the best overall trading experience, I recommend using CoinSmart, Bitbuy or Newton instead. Each of them offers quite a bit more than Paxful, and I’m confident you’ll have a better experience with them.

How Well Is Paxful Reviewed On Reddit?

Reddit’s review of Paxful is uncertain: some Redditors have good things to say, while others don’t. Of course, Redditors are known for their brutally honest opinions, so take what they say with a grain of salt.

Can I Buy Dogecoin With Paxful?

No, you cannot buy Dogecoin with Paxful. If you want to buy Dogecoin, I suggest using CoinSmart, Bitbuy or Newton instead.

Is Paxful Insured?

No, Paxful’s crypto holdings are not insured.

Paxful Referral Code

You don’t need a referral code to get your signup bonus with Paxful. Simply sign up using our signup bonus link and then deposit $100 or more into your account.

Does Paxful report to the CRA?

No. Considering Paxful is not a registered MSB by FINTRAC, you'll have to report any crypto income you make from Paxful yourself.

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