Bitcoin

PayPal has blocked a user’s account for trading cryptocurrencies via PayPal’s own service

A PayPal user reported that his account was restricted after buying and selling cryptocurrencies too often on the platform.

According to the American Reddit user TheCoolDoc, PayPal sent him a message that his account has been permanently restricted “due to a potential risk”. The user said that had carried out at least 10 cryptocurrency transactions in one week, Buy during the dips and sell when the price rises and that PayPal asked him for additional information for each transaction.

“The system tagged my account with the thought that I sold $ 10,000 worth of items in a week when I hadn’t in the last 6 years. I had a PayPal account.” said the user. “I sent the documents you needed for verification with a photo of my ID and wrote ‘PayPal Crypto’ for every cryptocurrency transaction. What else could I say?”

PayPal has blocked a user’s account for trading cryptocurrencies via PayPal’s own service
PayPal has blocked a user’s account for trading cryptocurrencies via PayPal’s own service

Within hours PayPal apparently sent him a message that the user “could no longer use the platform”. The user stated that the remaining funds in their account, USD 462, were held for 180 days, but since then they have used other means to withdraw them.

The platform set a limit of USD 10,000, which was recently increased to USD 20,000, for cryptocurrency purchases made within a week for customers in the United States. A limit that the Reddit user did not exceed.

“I know 100% that I didn’t do anything wrong and it’s a misunderstanding because they believe that I made more than 50 buy / sell transactions of items when it was just cryptocurrencies in one week”, TheCoolDoc said.

PayPal announced on November 12th that it would allow authorized users in the United States to use cryptocurrencies to trade and execute payments. The Reddit user, Cryptix001, He also reported on issues with the platform for processing cryptocurrency transactions:

“I told them I use PayPal to transfer money from one of my online accounts to my main checking account (Coinbase to checking account) to avoid the long withdrawal time. I never had a problem with it until it was a large amount was money I needed to pay a few bills. It was a terrifying week before they finally agreed to release my money. I will never use PayPal again. “

Platform Policy notes that users who buy or sell cryptocurrencies through 2021 will not be charged commissions and no commissions will be charged for holding cryptocurrencies. The Reddit user “bittabet” suggested that a partial explanation for PayPal’s actions could be that the company is losing money to users doing high-volume transactions.

“PayPal is not a cryptocurrency exchange, its service is designed so that users can have Bitcoin and then spend it at their affiliated merchants when they enable this capacity”, explained the Reddit user. “If you trade all the time, you will lose a lot of money on these commissions because they don’t currently charge a commission. We want your service to be more like a bitcoin bank account, not a trading account.”

Even if the platform removes the restrictions from your account, TheCoolDoc said that he would “never buy a Satoshi cryptocurrency again” with PayPal.

Cointelegraph contacted PayPal for further comments on the matter, but we have not received a response at the time of this writing.

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