PayPal Suspended a User’s Account for Trading Cryptocurrencies 

One of the PayPal users reported account restriction after frequently buying and selling cryptocurrencies within the platform. 

According to TheCoolDoc, PayPal sent it a message saying they had permanently limited the user’s account due to potential risk. The user had made at least ten cryptocurrency transactions in a week. They included buying during dips and selling when the prices rose. PayPal required additional information for each transaction.

The user stated that the system flagged the account, thinking that he was selling items valued at $10,000. He claimed he has not put anything on sale for the last six years and he had a PayPal account. The user sent the required things such as a photo of his ID and wrote ‘PayPal Crypto’ for every crypto transaction.

Within hours, PayPal sent a message saying that the user could no longer use the platform. The user stated that the remaining funds in his account, $462, were held for 180 days. However, he has used other means to withdraw them.

The platform imposed a limit of $10,000 for cryptocurrency purchases made within a week for customers in the United States, which recently increased to $20,000. The user denies ever exceeding the limit of $10,000.

Paypal loses lots of money covering commissions

PayPal announced on November 12th that it would begin allowing eligible users in the United States to use cryptocurrencies to trade and make payments. Another user also reported having problems with the platform for handling cryptocurrency transactions. He said he was using PayPal to transfer money from one of his online accounts to his primary checking account. This was to avoid a longer withdrawal time. The user stated he had never faced a problem doing this until a large amount of money became involved. It took them a harrowing week before they finally agreed to release his funds. 

Users who buy or sell cryptocurrencies until 2021 will not face commission charges according to the platform’s policy. Moreover, no commissions are charged for holding cryptocurrencies. The user suggested that a partial explanation for PayPal’s actions could be that the company loses money to users making high volume transactions.

PayPal is not a cryptocurrency exchange. Its service is designed so that people can have Bitcoin and then spend it in their affiliated merchants when they activate that capacity, said the user. If you are going to trade constantly, they lose a lot of money covering those commissions. Especially since they are currently not charging any commission. Their service is supposed to be more like a Bitcoin bank account, not a trading account.