Bitcoin Forum

I just sold some BTC on bitcoinmarket.com and have confirmed with the buyer that he did receive all of the bitcoins. The buyer sent the proper amount to my paypal account but 10 minutes later paypal froze that payment and asked for more information on the payment.

So there was nothing else I could do except reply back to paypal explaining why I received these and what they were for. I also attached the buyers email he sent me confirming his purchase and receiving the proper amount of bitcoins.

So my question is what happens next? What are some experiences people here have had with paypal and doing this sort of thing? I have a bad feeling that my account may be frozen after they review my explanation (due to the fact paypal doesn't care for bitcoin to much). If it is frozen and all funds in the account are frozen will I ever be able to withdraw them again?

I've never had a problem with paypal before so I do not understand why they would randomly freeze a payment and want me to give more information.

Any help or suggestions would be helpful.

Paypal is Latin for "dirty rotten thieves"

Because the user said you ripped them off and never delivered.

Unfortunately, since (1) BitCoins aren't something phyiscal, and (2) the PayPal TOS has a clause about virtual currencies, there's not much you can do.

It's getting to the point on #bitcoin-otc where people will only do paypal with trusted users.  But all the trusted users are using Dwolla, MoneyPak, or something like that.

You just got ripped off.

Unfortunately Dwolla and MoneyPak is U.S. only and does not work for canadians like me. :(

I *strongly* suggest you only trade with people you trust, or at least with people who have a positive bitcoin-otc rating.

Yeah I understand but when your trying to get the most for your bitcoin it's hard to find the right trusted people to sell to. I just bought a computer for mining and I'm currently trying to pay it off. If I wasn't trying to pay it off for sure I would only do trusted trades. It's just unfortunate that there isn't a better secured system to complete paypal transactions when selling bitcoin. Also I'm from Canada and bitcoins at the moment seem to be mainly US and Europe based. If I could get a US bank account some how then that would be perfect but I'm not sure how I would go about doing that.

Grab your passport and a bottle of lube, drive down south, pop in to a bank and bend over. They'll set you up.

LOL.... sigh...

Going to keep it as a last resort.

There is ONE way to safely buy Bitcoin via PayPal:

Tell the buyer to....

(1)   In his PayPal account, click Withdrawal Money .... amd "Request a check in the mail".

(2)   Wait for PayPal to mail you a check in the mail.

(3)   Wait for the check to clear.

(4)   Do a bank wire transfer to MtGox.

What? It's safe to buy Bitcoin w/ PP. It's just not safe to sell bitcoin.

Perhaps a dumb question, but: how do people get their first rating if nobody wants to trade with them?

Cheers,

You do a number of small trades with people who are willing to risk 1 BTC or 5-10 USD on a a newbie.  Setting up a Dwolla account FIRST and offering to use Dwolla for your first trades will also get you some trades and ratings much faster than offering up Paypal.

Right, thanks.


I'm not in the US, so Dwolla is of no use to me.  I can do SEPA bank transfers, though (although this is not ‘instant’).

Cheers,

I know I'm taking a risk by stepping forward here, I'm the buyer in this case.

Actually, he didn't get ripped of.

I don't want a bad rating because Paypal is reviewing the transaction.
Information from Paypal regarding the transaction: "This payment has been selected for review and we have opened an investigation."

Reason: Inquiry by PayPal, Temporary Hold
Status: Awaiting other party's response

I also mailed djex back keeping me posted about the review, and if any problems occurs, we have to discuss a solution.

djex, if you need me to contact Paypal in any way, mail me back.

Yeah I didn't think you had the mind set of ripping me off so no worries there. I posted here to see if anyone else had similar problems with PayPal recently since I'm not sure why they would randomly start an investigation.

As I said in my recent email I responded to PayPal's request and I'm just waiting for a reply from them. The reason I think the payment might be sent back is due to the fact it was for the purchase of bitcoin. We shall see what they decided. I'll let you know what they say.

As bitcoin is a direct threat to paypal, paypal will do all it can to screw up btc buy/sell transactions on its network.

I hope btc destroys paypal someday.

If you buy a shirt from iusecoins, they'll rate you on otc.  A few other services will too.

Did you put "bitcoin" as what the transaction was for? I put "other" as most of my transactions (no matter what they are) and have never had them ask any questions about it.

I would recommend that you have the person send the money as a 'gift', gifts cannot be charged back or are very hard to charge back in paypal.

I used "other" and wrote something like this "Here's the payment for trade ID xxx at BCM"

If they refund the money, I'll get them to djex another way...and I probably wont use paypal again... :(

This never happened before though...

While that us a good suggestion, nothing is hard about initiating a preypal chargeback.

PayPal froze randomly selected accounts so they can make money off the account balance.
Head over to paypalsucks.com and you will read more horrible stories.

unless you sent the money from proxy/tor and cry - HELP, I'M HACKED

pp is good only, when you are not the receiving side...

I would recommend you tell people who send you money via paypal to send it as a payment for a service, and for them to put inside the comments "I am happy with your consulting service I received".

It should minimize chargebacks if its intangible.

Thanks for all the suggestions. Just for a quick update on my situation PayPal has not responded to my reply to their "investigation". The funds are still frozen. I'm hoping they will respond in the next few days so I can move on and get this sorted out.

Just to update and conclude this thread PayPal finally took my funds off hold. It took them 3 weeks to "complete their investigation". During the course of these 3 weeks, 3 emails were sent to them. I sent 2 and the buyer sent one as well. Now I'm not sure if it was the emails or not that convinced them to release my funds.

What I found most funny was the email they sent me letting me know they released the funds.

"We have lifted the temporary hold on the funds. You now have full access to
those amounts in your account.
 
We appreciate your cooperation."

This was the message written in the email. To me this suggests they held the funds for the hell of it and there was no real reason to hold them, bastards.

Oh well I'll never use PayPal again and I would not recommend anyone use it. (but you all know that already :P)