Offering PayPal for Bitcoin? You're likely to be labeled a scammer - Read why

[bitdib]

My advice is to not use eBay or PayPal   Use an exchange.

Well said! eBay owns Paypal, and I don't like that. An exchange is certainly much better with less of a chance of being scammed.

[bitcoin_bob]

You may not use the PayPal service for activities that:

...

    relate to transactions that involve currency exchanges

That would require someone to officially recognize Bit-coin as a bona fide CURRENCY. Otherwise you are just buying and selling non tangible goods and computer bit strings, which, if paypal says you can't do with bitcoin, then you also can't do it with say a .Mp3 as well?

[TheButterZone]

You may not use the PayPal service for activities that:

...

    relate to transactions that involve currency exchanges

That would require someone to officially recognize Bit-coin as a bona fide CURRENCY. Otherwise you are just buying and selling non tangible goods and computer bit strings, which, if paypal says you can't do with bitcoin, then you also can't do it with say a .Mp3 as well?

FinCen; virtual currency.

[bitcoin_bob]

You may not use the PayPal service for activities that:

...

    relate to transactions that involve currency exchanges

That would require someone to officially recognize Bit-coin as a bona fide CURRENCY. Otherwise you are just buying and selling non tangible goods and computer bit strings, which, if paypal says you can't do with bitcoin, then you also can't do it with say a .Mp3 as well?

FinCen; virtual currency.

And who officially recognizes it as such enough for Paypal to be able to class it as one?

[TheButterZone]

You may not use the PayPal service for activities that:

...

    relate to transactions that involve currency exchanges

That would require someone to officially recognize Bit-coin as a bona fide CURRENCY. Otherwise you are just buying and selling non tangible goods and computer bit strings, which, if paypal says you can't do with bitcoin, then you also can't do it with say a .Mp3 as well?

FinCen; virtual currency.

And who officially recognizes it as such enough for Paypal to be able to class it as one?

Since when is PayPal immune from FinCen? Stop acting like you can beat assholes at their own game.

[poobah]

Paypal will do whats best for paypal.

[bitcoin_bob]

Paypal will do whats best for paypal.

which is probably going to be at some stage in the future, to try and buy bitcoin/copyright it/make their own version and force it as a payment method on ebay/skype/kijiji and whatever else the monster eats.

[boltactionz]

The real problem with using Paypal is, they consider Bitcoin a competitor.  Truth is, Bitcoin is not just a competitor but a SUPERIOR competitor.

If you were running Paypal would YOU assist YOUR COMPETITOR in putting you OUT OF BUSINESS?  Think about it...I know I wouldn't!

And so using Paypal is risky for both buyer AND seller.  Why?  Because just like when e-gold was around and was better than Paypal, Paypal's user agreement does not allow for using the account to trade or exchange currencies.  They specifically put it in the user agreement that you would not do that in order to protect themselves.  They have a lot of licenses that they hold, and some of them are kind of unique and very specific depending on what locale the license is from.

Using Paypal as a buyer is risky because it gives them a reason to freeze your account.  And if you are doing business with that account it presents a real nightmare.  The thing with Paypal is, they are most likely to shut down or freeze your account when it's most advantageous to THEM, which in many cases (probably most) means when it's least advantageous to you.  For instance, when it has a high balance and you need that money to continue operating!

Paypal worships Murphy and his laws, attempting to imitate Murphy at every opportunity...

[boltactionz]

Paypal will do whats best for paypal.

which is probably going to be at some stage in the future, to try and buy bitcoin/copyright it/make their own version and force it as a payment method on ebay/skype/kijiji and whatever else the monster eats.

"whatever else the monster eats."

Tell me about it!

A lot of people say that Meg Whitman lost when she ran for Governor of California due to the fact she might have had an illegal maid working for her.  I actually think that there were a lot of eBay sellers that were California voters who voted for the other person because of their long memories of what eBay became on her watch.

But that's just my opinion.

One of the deep dark dirty secrets Paypal doesn't want people to know is, they are a licensed money service bureau in several states, California being one of them.  The laws in California state that all money service bureaus MUST provide money sent to someone within one week, that they are not allowed to hold money any longer than that.  It's rather ironic because Paypal freezes accounts for 6 months, sometimes longer.  But if you file a complaint with the right people (or even tell Paypal either on the phone or via email that is your next move) then someone at Paypal will call you back from that mysterious department that supposedly never takes any calls and work things out with you much faster.

If they lose their money service license in California they are likely out of business for a while, although given the status of the California economy they can likely just pay them off somehow (big fines, no jail time) since the government is broke.

[FeatherLite]

Great info thank you for posting that

[Equate]

i try to avoid paypal while dealing with cryptocurrencies.

[BitshireHashaway]

Very interesting and fascinating information, I'll have to go and do more research for this. The problem as I see it is that in paypal's attempt to be fair they include features that if one is not honest they can abuse in order to try and get more reward for themselves.

[bitsuser]

Paypal...

It's only good for ebay, and rarely nothing else... (like bitcoins)

[Taccomc]

how come you don't just make a Mt Gox gift card with the code right on the card, send it to them physically with tracking number. As far as I know physical products with tracking are covered under paypal and ebay's  tos.

[SilentFlute]

With all the cryptocoins being sold on ebay, paid via Paypal, i'd have thought that they would seem to have accepted its trade.

[MiningUnited]

If you sell with PayPal, they will catch you:

https://bitcointalk.org/index.php?topic=194646.0

[SilentFlute]

I hear that cryptocoins aren't officially currency, just 'financial instruments'.

Also, doesn't ebay have a 'coins' section where currency is bought and sold, via Paypal.

[MiningUnited]

Also, doesn't ebay have a 'coins' section where currency is bought and sold, via Paypal.

Coins are physical, BitCoins are not. Selling BitCoins on paper or plastic, sending the buyer a physical item, is not against their ToS.

[SilentFlute]

Can you sell services via ebay/paypal?

Where the only thing sold is work done?

Aren't bitcoins evidence of work done?

[de_xt]

If you sell with PayPal, they will catch you:

https://bitcointalk.org/index.php?topic=194646.0

Wow, I didn't know this. Does the same restriction apply to other online payment systems such as OkPay?