Hello WORLD!
I opened account with Paxful before 2 years and never used it until now 07.01.2020. I decided to give a try with them and I was read their TOS. I didn't found that my country is on OFAC list (My mistake) - but why my account is not banned, how can I log in without to be warned?!?. I checked is ID VERIFICATION MANDATORY (only if you traded more then 1,5K) . Then I sended some btc to sell, after few hours I got email that I needed to be verifed. My account was frozen! If my country is on OFAC list why they didn't bann my account, warned when I logged in (when my account was empty)!? Support told me that I need to verify to withdraw my money and if I log in with same ip adress multiple times (ip of my country), after I verified, they will bann/freeze my account!? So why to send them my documents if I must use proxy/vpn to log in and wait when they will block me again!? So I log in with ip adress which is not on OFAC list so they can unfreeze my account :-). Literally they took my money. If something change I will let you know. I just want to warn others to be careful with them! Sorry for bad English!
What made you select them to trade with in the first place? Did you do any research before signing up. I know you said they banned your account after you sent the deposit and now they have you between a rock and a hard place because they want KYC before releasing the funds but they will probably stick to that line.
Whether this is a case of selective scamming or not cannot be confirmed for multiple reasons right now but waiting for you to deposit funds and then block the account sounds highly suspect to me if they make it hard for you to retrieve your funds. I think asking for KYC is one of the things that many users will not send in to these types of companies for one reason or another so they use it as an excuse to withhold funds.
When I have time I might start looking in to Paxful to see what is going on. If they are scamming then they should be discussed in the forum on a wider scale.