PayPal does not seem too happy with people who are involved in crypto via their platform.
If you have tried to transact cryptocurrency utilized PayPal’s platform, you probably would have experienced some issues that would be concerning to you. Some problems may be that one might experience forms of fraud or maybe a chargeback.
It looks like the company is going even further to discourage PayPal users from having anything to do with bitcoin using its platform by putting accounts on hold. If the company finds users are using their PayPal accounts to buy or sell the virtual-currency or have anything to do with cryptocurrency, they are likely to ice their account.
Users are finding this troubling, what if they had funds in the account that were not related to cryptocurrency activity? Do they lose access to those accounts for the amount of time that their accounts are frozen for? Yes. Their entire account is iced, so they will not be able to access any funds.
Users are shocked by this and then wonder, “Wait, is this legal? Is PayPal allowed to do this to me?” We’ve seen in the past how PayPal can treat its user base; they have increased its fees and done other things that may have annoyed users, but acts like this may be even more aggravating.
One particular case that has gone somewhat viral has been that of a woman, presumably in Ireland.
She states that her account was frozen by PayPal.
“They have frozen my sale payments for 180 days with no appeals! Can they legally do this? I have bills to pay and I have never complained! Plus, they never said anything every time I got scammed and called. Now I get this letter.”
Say to no to PayPal when going crypto.
The lesson that one needs to learn from this is to not use PayPal when engaging in crypto related activities.
Remember that it is not in PayPal’s interest in the short or long term to allow this sort of activity; PayPal is a payments company, bitcoin is a peer to peer payments platform and more. PayPal is heavily subject to regulatory authority and needs to make certain that they stay out of legal trouble.
PayPal may be convenient for fiat based transactions, but it is shaping up to be a bad idea for crypto-based transactions. Do be aware of the lack of the safeguards in place for those that seek to purchase or sell cryptocurrencies.
Chargebacks can also be a big problem to those who seek to make sales of cryptocurrencies. The buyer can state that they are not in possession of the currency that a seller has sold them and can then get their fiat money and also keep the cryptocurrency that buyer sent over. In cases that the seller is legitimate and had sent over the virtual assets, the ultimate authority is the company and the company is known to be in favor of the buyer as opposed to the seller.