my paypal acc was frozen cause i sold bitcoin, why are they having such a sudden change of heart.
Yeah Paypal was terrible for buying Bitcoins, it still is.
And their "virtual goods" policy is rarely enforced outside of bullying cryptocurrency users, for example, most text based RPGs sell "donator packs", a virtual good, through Paypal, and they have thriving businesses. I wish they would sort out this hypocrisy.
It's all about risk though. And involving themselves as a middleman for Bitcoin purchases is about as risky as it gets.
Picture this: A person sells 1 Bitcoin for $500 in Paypal. The seller immediately withdraws the $500 to their bank account, then disconnects their Paypal account from their bank account. The buyer receives the Bitcoin, then immediately issues a refund request, indicating "item not received" or whatever other BS they come up with. Paypal tries to withdraw money from the seller's bank account to cover the refund, but fails. Paypal still has to give the buyer back his $500. So who is left holding the bag? Paypal. And it'll take dozens if not hundreds of transaction fees to make up for this loss.
Now I'm sure that Paypal would love to handle Bitcoin transactions (because why wouldn't they love more revenue?), but they know that Bitcoin related transactions are generally much riskier than say, a customer buying something from newegg with Paypal, so they simply eliminate any transactions that are Bitcoin-related to eliminate that risk. You could argue that Bitcoin transactions can be proven via the blockchain, but the only true way this could be proven to Paypal is to have communications done through paypal as to which address would be paid when and how much. Can we really expect Paypal to employ their own army of cyber-sleuths among their customer service department to deduce the truth? Not when they're only getting paid $0.30/transaction to do it.
I can't really fault them for doing this. Bad actors in the Bitcoin community brought it down for all of us. The good news is, Paypal doesn't hate Bitcoin at all, they were simply avoiding unmanageable risk. When Bitcoin is integrated in Paypal wallets though, Paypal will ultimately have control and detailed information about what actually happened, what payments were actually sent and received and by whom, etc. Paypal will become a de-facto Bitcoin exchange with no risk to the customer.
