That sucks, never know paypal have so many restriction. What if I buy/sell BTC using paypal?
They can't find out that you bought/sold anything, because there is just a sender and a receiver (when you are doing it right).
Example: You want to buy btc. You send an amount of money to the person you want to get btc from. This person sends you btc in exchange.
So the only thing that paypal knows in this case is that you sent an amount of money to someone. But they have no idea why.