PayPal users who use the service for high-frequency crypto trading should be cautious about having their accounts banned. One Redditor reportedly learned this lesson recently with the payment giant placing a 180-day hold on his purse that still has about $462.
Apart from the likelihood of users facing account closures for trading crypto on PayPal, the situation also brings to light some deficiencies in the company’s customer service, which may present issues for cryptocurrency owners.
PayPal is a Crypto Purse, Not an Exchange
In a Reddit post on November 25, a user revealed that the global online payments giant PayPal permanently blocked his account. The Redditor stated that the action was taken after conducting cryptocurrency trading on the platform.
Based on the post, the company’s system marked the account, believing that the user was selling items worth $10,000 in a week. Subsequently, the aggrieved customer had to indicate that the transactions were actually crypto-related.
The feedback from the online platform reads:
After a review, we’ve decided to permanently limit your account due to potential risk. You’ll not be able to conduct any further business using PayPal.”
In addition, the company as part of its standard protocol, is holding the Redditor’s fund for 180 days.
Things to Consider
Indeed, while PayPal has recently adopted crypto, the purpose of the service veers towards being a funding source for online shopping. Since the company is using a zero-fee model, day trading on its platform could see the payment giant incurring a massive cost burden to cover those transaction costs.
Several respondents on the thread pointed out this same reasoning to the aggrieved Redditor. For his part, the user also alluded to the poor customer service as being another issue with PayPal’s crypto sojourn.
PayPal made headlines in the crypto sphere back in October 2020. At the time, the company announced that customers would be able to carry out transactions using bitcoin and other cryptocurrencies in late 2020 and in 20201. Since the announcement of its cryptocurrency adoption, the platform has reportedly shown interest in acquiring crypto firms and it is also on a bitcoin buying frenzy.