The dangers of buying bitcoin thru Paypal - real life example

[BuNga_cute]

Paypal will ban accounts that do too many Bitcoin transactions, because Paypal is not a place to trade. So buying Bitcoin on Paypal is
only for long-term investment, if we want to do short-term trading we can do it on the exchanges. Thank you opening post for sharing
information about Paypal regulations regarding Bitcoin transactions, this reminds us all to avoid Paypal for trading.

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[khaled0111]

He did the right thing by writing about this incident and exposed them on different crypto-related websites. It seems that his efforts has finally payed off as Paypal decided to recover his account:

EDIT EDIT EDIT :

Got an email today that my account has recovered completely. I don't have 'Funds Now' anymore, but beggars can't be choosers.

Obviously, they didn't want to see the bad news to be spread few days after they launched this new service.
What shocked me the most is the incompetency and the level of ignorance of their customer support team!

[manfredmann]

Well if you are doing nothing then there will be no problem. Yes, centralized exchange and the paypal platform itself which relatively new to bitcoin can hold funds with their users or freeze it whenever it is suspected as doing illegal activities. Hence, if you are not doing something like illegal then there is nothing to worry. I myself had been using a centralized exchange over the years but have no experience in getting account freeze not unless I will do something that could violate their rules and regulations.

[Walterhank]

Thanks for the heads up. You have point there, we should be very careful with our funds as losing your keys means that you lost all of your assets.

[thesmallgod]

If they wont allow it why do they authenticate those transaction. If there is a limit to the numbers of transaction someone can perform in 24 hours, they should have put that. Even in many centralized exchange including binance, there is a limit to amount of withdrawal transaction you can do in a day. If you want to increase that, you will need to complete the KYC procedure. I believe maybe because they just start to allow this transaction, with time they will take care of such a thing. I can people writing about not your key not you coin, DEX also have their own limitation. He could not have made those transaction on DEX due to low liquidity. If you want to huge transaction, it is better to make use of centralized platform which he has used except for this limitation.

[adzino]

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.

Not surprised at all. But looks like that guy was constantly selling and buying during dip and rise. I guess that is the reason why his account got banned, According to another user, he says that you are not allowed to use paypal as an exchange and trade over there to make profits. You were supposed to use paypal for buying and holding your coins. Not sure if they have those terms clearly mentioned on their site. Still a shit thing to lose your funds.

[fauzan123]

I still don't understand why the adopted bitcoin... To make more money or what? I don't even know if to believe that the bitcoin in a user's account is real or some figures they are manipulating in their back-end database.

they say that users cant withdrew thier btc inside thier paypal account and im also thinking that paypal doesnt really implement the whole crypto thing but like you said , it can only be figures and they do this to make more money .

the guys feedback can be a reference to us that plans to invest in crypto inside the paypal in the future if what to expect .

this was still early and paypal can change the way the work for once and for the sake of crypto .

Another way you could tell is the blockchain. If I send 1 BTC to you, it will show on blockchain that I actually had a balance of 1 BTC, and that I sent it to a wallet who now holds the 1 BTC. But PayPal's trasanctions can't be seen on blockchain (as they allegedly said).

Paypal legality can be a unit of reference where the thing not to send it is very minimal, because it relates to the reputation of paypal itself.

Indeed, many use such a system, some of the exchanges also do not show the transactions entered in detail. But overall we do need to be careful, because considering that Paypal is also just using a system with bitcoin support so it could be that the smallest things have errors it can get. Of course, we can see the proof that has happened to members who have bought bitcoin via paypal whether it is safe or classified as risky.