The dangers of buying bitcoin thru Paypal - real life example

[cryptomaniac_xxx]

According to this reddit post by u/TheCoolDoc, his account gets banned by Paypal and then limited because of too much activity, buying/selling bitcoin in a week.

I let your read the rest of the story.

In any case though be reminded, "Not your keys, not your coins". So anytime this centralised services can either ban you or selectively close your account, and not good if you have some funds on it.

[n0ne]

PayPal being centralized and profit focused, buying/selling of bitcoin will be limited. Because, when the market bounce beyond the prediction the profit is enjoyed by the users and not the company itself. This is where paypal makes buying/selling bitcoin through them a dangerous task. The usage of bitcoin keeps increasing with the integration of buying/selling through PayPal, but it isn't quite safe as that we use through reputed exchanges.

[milani]

what did you expect?

To my mind lots of people after the announcement about PayPal and crypto hoped to get the real adoption of crypto currencies by this services and just forgot what the monster is hidden behind this process. People just thought positively about this proccess and thought that finally it had happened and such famous system with strict ruless of using might really allow people to use their crypto assets in a really suitable way. But personally I have a very realistic attitude to such kind services. And Ithink that people should first try to learn in deep the history of the service and do not forget the policy of the company to its users in previous years, it always shows what the nuances may be in future. But I do not think that person that wrote the article is silly. He just believed them, and forgot a little about the reality.

[omone1]

I am always scared of such centralized system that could censor or ban your account at will, although it's part of adoption the integration of bitcoin in Paypal, which is necessary for Paypal to staying relevant in the future. For now, I will keep using platforms that work for me in bitcoin transactions.

[ReiMomo]

Definitely, PayPal is not a trading platform it will just give you a headache if you use it for your trading activities, this is the negative impact to the crypto holders that after celebration when PayPal acquires bitcoin to their services which had brought good effect on mass adoption.

Though PayPal offers services for bitcoins through their platform it is still a centralized financial company that abides by regulations from the government. Bitcoin traders, I guess should not use it anymore for trading however we may still consider PayPal for other exchanges like online purchases besides PayPal has given us a great contribution to the global adoption that we are aiming for.

[Oshosondy]

While using fiats on PayPal, they do ban people, that is why some people still like to use alternatives like Payeer and Skrill. But custodial services should be regarded as nothing more than custodial services, they will only tell someone that he/she has the full control of his coins but just a pure lie. I did not see it surprising that PayPal could do such a thing because it is not new, there will still be many of this that will still happen. And with all these, people still like to make use of such services while they can hold their coins for themselves.

[Cryptogainz]

I?ve heard PayPal at some point next year will allow the withdrawal of Bitcoin to your own wallets.

[dothebeats]

This is what people would get without reading T&Cs on such big services like PayPal. They can literally do this even if what you're doing is practically and essentially legal, unless they deem it not so. PayPal's bitcoin offerings is not meant to be an exchange platform wherein a user can buy and sell bitcoin almost every minute whenever their positions are already profiting. They just like you to give them money to give you some virtual bitcoin ownership, since you can't really withdraw it out of the platform in the first place. It's kinda cheating since you can't really use it anywhere else--only on PayPal, which sucks.

Perhaps this should be a warning to people that wanted to do some form of trading activity on the said platform. It isn't designed for such, and account suspension might even entail if you do these things similar to what the user did.

[Twentyonepaylots]

Forget about "Not your keys, not your coins", they don't even let their user make profit from buy/sell Bitcoin. PayPal should emphasize that their platform aren't mean to be trading/exchange where user can buy/sell Bitcoin regularly.

It's really funny how they wanted bitcoin and not buying and selling lol and I agree they should emphasize it at first coz people are naturally into profit with cryptocurrencies. If they continue to suspend people from doing so, then I see nothing for paypal to be with any crypto, they need to stop. Now I can't stop thinking how many companies will be like this in the future 

[Twinkledoe]

I must admit that I am still amazed that some people are still using Paypal in 2020.

At some point, you can't avoid using their services. Even me, I am still using it because a lot of merchants are using the PayPal so you have no choice but use their platform. But when it comes to crypto services, I believe most forum users will not use their platform to buy/sell crypto. There are a lot of exchanges which are way better than PayPal in terms of rates offering. Most newbies in crypto will use their services but when they learned more about crypto, I don't think they will stay in PayPal when it comes to crypto transactions. So I guess, PayPal is a good introduction to crypto for its millions of users.

[MusaMohamed]

"Not your keys not your coins" is used for private keys. On Paypal, people even don't have a touch on their public keys. What a shame on Paypal and how naive people are to simply believe in Paypal.

The feature to get bitcoin on Paypal is bad: you don't control your private key and you don't have any touch on your public key. They are playing as a middle service and is worse than other crypto exchanges. At least on crypto exchanges, you have touch on your bitcoin public keys.

[Lorence.xD]

Forget about "Not your keys, not your coins", they don't even let their user make profit from buy/sell Bitcoin. PayPal should emphasize that their platform aren't mean to be trading/exchange where user can buy/sell Bitcoin regularly.

Exactly, in my opinion both parties involved is at fault in the story, Paypal being the biggest participant in the problem. I do not know the full story but shouldn't the user knew that in the first place, there should be a clause there that says that they can't treat the platform as a trading platform and if there is none that can help deter users to do trading then the fault is all in Paypal's hands. In the defense I guess of Paypal, I think that they are just preventing possibilities of money laundering.

[L A R A]

PayPal is not a trading platform for Bitcoin. He only facilitates us to make it easier to buy Bitcoin using a PayPal balance or credit card.
If we have already bought it we are not advised to hold it there, better withdraw it directly to a personal wallet.

[Wexnident]

There's already a thread about this if anyone is curious
https://bitcointalk.org/index.php?topic=5293387.msg55685306#msg55685306
Anw, my take here is that the man in question seemed to have used Paypal itself as an exchange, with the repeated buys/sells over the weeks continuously. Though the idea stands of the not your keys not your coins kind of thing, it isn't the main issue imo, not that I know what Paypal actually wanted it to be, since given the current example, it doesn't look like it looks favorable to it being used as an exchange. If so, what exactly is the use of the feature they have to buy and sell crypto no?

[meanwords]

The interesting part is

No appeals. No explanation. No consideration that their reviewer may be an ignorant 60 year old with no knowledge of PayPal's own crypto service. Whenever I've called their support about PayPal Crypto in the past they had no idea what I was talking about (even after weeks after release).

This kind of shows that Paypal really isn't much interested in Bitcoin at all and just integrated fake Bitcoin just for show. I don't know why they did this but at least the user got his account back. But still, it just suck that Paypal doesn't want to do anything unless they were being exposed.

PayPal is not a trading platform for Bitcoin. He only facilitates us to make it easier to buy Bitcoin using a PayPal balance or credit card.
If we have already bought it we are not advised to hold it there, better withdraw it directly to a personal wallet.

But the thing here is that, they don't want to let people withdraw their crypto from paypal so all you can do is either hold Bitcoin in paypal wallet or trade there which this user did and turned out to be a really bad situation.

[mnporter2001]

According to this reddit post by u/TheCoolDoc, his account gets banned by Paypal and then limited because of too much activity, buying/selling bitcoin in a week.

I let your read the rest of the story.

In any case though be reminded, "Not your keys, not your coins". So anytime this centralised services can either ban you or selectively close your account, and not good if you have some funds on it.

This is the biggest weakness of centralized platforms. They all hold all the keys and power, when we use their services they can do anything to limit you. And of course, we won't be able to do anything to them because we have to obey their rules.
That's why I always remind people to split money to stay in many different exchanges in order to have a problem, we still have money to manage the costs around.
Although they have the advantage of reputation, they also offer strict rules, so please read the rules carefully before using them.

[Akiko]

I?ve heard PayPal at some point next year will allow the withdrawal of Bitcoin to your own wallets.

If it's true then drop the link so we can read it .

PayPal is not a trading platform for Bitcoin. He only facilitates us to make it easier to buy Bitcoin using a PayPal balance or credit card.
If we have already bought it we are not advised to hold it there, better withdraw it directly to a personal wallet.

Indeed they are not exchange platform so why waste your time using it if you know they only have that option to earn from its users.  use an exchange platform to convert Your crypto not PayPal you may lessen  transaction fees.

[zeingrind777]

That's why I don't trust PayPal when it comes to cryptocurrency. Storing bitcoin using PayPal services is a very big risk. Because the private key is only controlled by them.

[Rengga Jati]

In any case though be reminded, "Not your keys, not your coins". So anytime this centralised services can either ban you or selectively close your account, and not good if you have some funds on it.

I already read about it and wait for the conference or confirmation from PayPal because we don't really know the exact problems or there may be any other problems.
But in PayPal itself, we don't only have that key, but also we cannot withdraw the funds in cryptocurrency. The feature is still not available to withdraw our crypto there. So, it means that if we want to move the crypto, we must change it into Paypal again or other fiat currencies. Well, lets; see how the development and progress of this PayPal later

[lovesmayfamilis]

PayPal is not a trading platform for Bitcoin. He only facilitates us to make it easier to buy Bitcoin using a PayPal balance or credit card.
If we have already bought it we are not advised to hold it there, better withdraw it directly to a personal wallet.

How well said. Who does NOT recommend? Have you read the PayPal news? Or are you just in a hurry to fill the subscription quota with your publications? I recommend that you get a little interested and read about what is happening around you.
For your information, if you buy bitcoins through PayPal, there is nothing you can do about it. Impossible to withdraw to another wallet as you advise. The only thing you can do with your coins is to buy goods from online stores or leave Bitcoin on hold, which is also dangerous. Because PayPal is famous for its frequent blocking of accounts. Not to mention the fact that you provide all documents for maximum "anonymity".