Blocking accounts by PayPal for crypto activity

[Akiko]

Its a shoking news that Paypal ban account for cryptocurrency transactions. If they suspend or ban account related to suspected transaction, many verified members won't trust on Paypal for anymore and new members won't create account of Paypal for their bad practice after they declared 4 coin's acceptance.

They already do that before so I will not be surprised if they do it again, they are not supporters of crypto currency they are just using the popularity  of crypto currency to earn from its users and nothing more.

I actually found article from 2014 when they are banning users from Bitcoin talk for selling goods related to Bitcoin or crypto currency that use their platform. https://www.entrepreneur.com/article/231302

[target]

Paypal disallow BTC transaction long time ago, its just this year that they publicly tried to join the crypto race. There were some users who had been banned before if they learn the user is using their funds to buy BTC.   I don't know how they tracked those transactions.

What's the purpose of permanently banning an account and locking funds in it for 180 days? That's about six months and seems an awful long time to hold on to a user's funds without enough justification.

This does not really come off as a surprise, when you use a centralized platform, you technically waiver your decentralization and autonomy and have to conform to the ToS of that platform regardless how stringent they're.
Someone made a reply to that post and I think it would be useful for other users who plan on moving huge funds through PayPal;

PayPal isn’t a crypto exchange, their service is meant for people to hold bitcoin with and then spend it at their merchants when they turn on that ability. They’re currently paying all the trading fees when you buy or sell because they’re actually buying the bitcoin for you on ItBit so if you go and trade constantly they lose a ton of money covering those fees since they’re not charging any fees right now.

Their service is supposed to be more like a Bitcoin bank account, not a trading account. Maybe they need to make this more clear, but it’s really a service for people who want to hodl bitcoin and then spend it at PayPal merchants. So it only makes sense that if you’re doing high amounts of trading in and out that they’d kick you out since they’re just losing money.

The reply make sense, paypal doesn't even allow users to withdraw BTC. But how do they trade inside paypal, is there a pair there like BTC/USD?   Its not available in my country, I have not tried but permaban is too much while they still have funds there.

[avikz]

We all initially thought that Paypal's introduction into cryptocurrency world will fuel its adoption among the commoners and that's why this community cheered about this news! No one really knew that Paypal wouldn't support withdrawal of purchased cryptocurrency and what not!

Now when the cat is out of the bag, only a fool will continue to use Paypal for their cryptocurrency related needs. Such kind of incidents are really eye opener for us!

[NotATether]

It's been like this ever since Paypal were aware of crypto. I guess many people won't understand the difference between Paypal's Bitcoin fun tokens and their arsiness if you use their services to dabble in the real thing.

I can imagine this is going to a happen a lot more often after tailing off over the years.

That's the gotcha. They want people to use bitcoin, but only if it's their version of bitcoin, with different rules and restrictions. And PayPal definitely isn't the only banking company that wants to do this.

If even one of these services closes down, they will dump their backed BTC on us and send the price crashing down with it. And that's not even the worst part.

The worst part is, their locked down version of bitcoin is going to be most people's de facto definition of bitcoin, as if it was some currency invented and controlled by the banking industry.

Yes, PayPal adopting bitcoin is good for the price in the short term, I said that before too, but it also has negative long-term repercussions for the community.

[so98nn]

Well, the bad news about the blocking of accounts by PayPal began.
Someone here recently was so happy about the introduction of bitcoin into this system. I think PayPal will not do anything to its detriment but on the contrary.
News about the blocking of an account that PayPal suspects have generated too much crypto activity in a week.

Ask me! I was very happy to see paypal getting along with the cyrpto currencies and also spoke the same with my friends many times. Never thought that this day would come really.

I never had problem of showing up my identity to such services but since many dont want this to happen, it could turn into chaos if too many complaints are logged against paypal support. 

https://coinmarketcap.com/headlines/news/this-user-had-his-paypal-account-banned-for-trading-cryptocurrency/

The account was blocked, and, as always, they demanded to provide documents and everything else. I think this is a very common practice of this system. I once suffered from their suspicion. Now the user who has been verified will not trust PayPal a second time. I think our joyful expectations about this system were premature.

Too much premature I believe. 
Honestly we had thought that PayPal being oldest and pretty much popular platform will kick start things for crypto to fiat and fiat to crypto transactions. Sadly that looks on another path. Lolz.

[20kevin20]

I read the comment of one expert on this situation. 

Well, what the guy said about the situation makes it even worse.

They’re currently paying all the trading fees when you buy or sell because they’re actually buying the bitcoin for you on ItBit so if you go and trade constantly they lose a ton of money covering those fees since they’re not charging any fees right now.

And that should be no one's problem but PayPal's. As long as they allowed their customers to purchase and sell cryptocurrencies, the fact that they did not take fees into account is NOT a valid reason to seize funds. Moreover, as I previously mentioned, they rose the limits from $10k to $15k per week. That's not something you do when you have too much trading to cover your fees.

Their service is supposed to be more like a Bitcoin bank account, not a trading account.

Last time I checked, I was allowed to deposit and withdraw money from and to my bank account as many times as I wanted without having my money seized. Banks take fees for txs so this is, once again, PayPal's fault for not considering them before actually pushing out the "crypto purchasing" feature.

I'd just move on from their service and never go back again. Fuck them.

[TopT3ns]

this is what makes the price of bitcoin suddenly experience a very drastic drop and makes a lot of people lose, if paypal always does this then it certainly won't be a good bridge for bitcoin, moreover maybe this can be used to see if paypal can have an influence on bitcoin price movements or not, unfortunately this is proven and it is certain that paypal will be used for price games by the whales who rule the world economy.

[Arkann]

There are a lot of weird things going on with paypal. They allow users to buy Bitcoin using their payment system and immediately buy almost 70% of the recently mined Bitcoin themselves and currently block users due to activity with associated cryptocurrencies. It seems to me that this indicator will already lead away from PayPal a fairly large number of users who are somehow connected with cryptocurrency. But it is possible that this is aimed at identifying people who somehow violated the law.

[sheenshane]

There are a lot of weird things going on with paypal. They allow users to buy Bitcoin using their payment system and immediately buy almost 70% of the recently mined Bitcoin themselves and currently block users due to activity with associated cryptocurrencies. It seems to me that this indicator will already lead away from PayPal a fairly large number of users who are somehow connected with cryptocurrency. But it is possible that this is aimed at identifying people who somehow violated the law.

Exactly, that's other people didn't touch or use Paypal until they had stable service.

IMO the reality bites, since PayPal as of now isn't charging any transaction fee for all the activities we are doing with our Bitcoin.  To avoid losses on their end then they would really find ways on how to avoid such losses.  AFAIK in PayPal, they really tend to block an account for a certain period of time if the account holder made a transaction that is beyond the average amount that they are transacting on a weekly or monthly basis which may appear to be suspicious to their system.

The sad thing here is that the anonymity of the Bitcoin holders will be at stake since they need to provide detailed information as to where and to whom will the Bitcoin go.

[Oneandpure]

I have talk to every one be quit when purchasing your fund to buy bitcoin and altcoin trough PayPal because their system very sensitive and always to make your account limited permanently, first time in online working I know with PayPal and use this platform more than three years until I am tired with my account always limited without any reason, other time I can't sent transaction with PayPal because they make our account error to sent balance to other account, when you got problem with account limited should waiting above six months to get back your money and hope bitcoin assets in your PayPal price is not down.

[Twentyonepaylots]

I didn't think we'd encounter this as early as they introduced it, like what? a month ago? I thought things are better with crypto being with paypal but it turns out that it won't be a good one. I'm telling you guys this is just the first, more people will be accused soon as more people will move to paypal buying and selling cryptos. In decentralized network you don't owe anyone an explanation  

[electronicash]

they are just starting but quickly shut the party down all because someone started making money out of it. now this should be a warning to all paypal users because they have been doing it since time. but why should you add "PayPal Crypto" when making transactions, it will surely make them notice it because we all know they don't allow Bitcoin from the beginning. even when they do allow it now, i don't think they will want their users to go beyond their control.

[kamadazje]

 This is the problem with PayPal as they are very strict in monitoring all the incoming and outgoing money that are passing in their platform and what is worst they will limit you or put your money on hold for several months.

Though $462 is not that huge amount of money, we should consider it as a lesson not to overconfident in using Paypal especially if we are going to use a crypto currency. Being banned because you are trading crypto currency is not a good news to all of us who trades crypto currencies so we should think twice before using Paypal for our crypto activity.

[ReiMomo]

It is not only PayPal whose doing this, there are other financial services that when you reach your transaction limits or you have gone far from your average spending on a monthly basis your account will automatically get a block, for their system is programmed to have limitations and once reached it will flag the account for suspicious activity.

In OP's thread, the thing that is painful here is the whole account in PayPal will be locked for a few weeks or months and not only your bitcoins but also the fiat that you have in the account which will be on hold at the same time and you won't be able to use it during the period of an account restriction.

[TedMosby]

yeah, that's what I warned about on almost every PayPal related thread on this board.
they can give you limitations whenever they want. the first time my Paypal got locked before because I used a different connection to logged in.
the second time, it was locked because I send money to an unverified account.
PayPal has a strict system. Maybe it's good for some people, but not for me.
luckily it's only a small amount of money.

[Walterhank]

These things are bound to happen for one and only reason and that is centralization. There should be more platforms and more support for decentralized platforms. I have heard similar things happening to various people on PayPal.