Fintech giant PayPal revealed it “safeguards” close to $1 billion in cryptocurrency assets for its clients. The bulk of the assets are in Bitcoin and Ether.
Electronic payment behemoth PayPal disclosed that it holds $943 million in crypto assets on behalf of its customers. In a recent filing with the United States Securities and Exchange Commission (SEC), the majority of the assets constitute $499 million in Bitcoin (BTC) and $362 million in ether (ETH). The company also holds Bitcoin Cash (BCH) and Litecoin (LTC) to a value of $82 million.
The filing further indicates that as of March 31, the value of the assets increased by 56%, or $339 million, over the firm’s previous quarter, where it disclosed $604 million.
PayPal does not actually hold its customer’s crypto assets but rather relies on third-party custodial service providers. The company conceded that employing third-party services does present a liability for customers should third parties be unable to process transactions but said that no such event occurred. PayPal said:
As of March 31, 2023, the Company has not incurred any safeguarding loss events, and therefore, the crypto asset safeguarding liability and corresponding safeguarding asset was recorded at the same value.
Reports indicate that PayPal, which owns Venmo, began offering the option to buy, sell and hold crypto on its platform in October 2022. The company, after that, expanded its crypto services to include sending, receiving, and transferring crypto assets between PayPal and other exchanges and crypto wallets.
We allow our customers in certain markets to buy, hold, sell, receive, and send certain cryptocurrencies as well as use the proceeds from sales of cryptocurrencies to pay for purchases at checkout. These cryptocurrencies consist of Bitcoin, Ethereum, Bitcoin Cash, and Litecoin (collectively, ‘our customers’ crypto assets’).
PayPal announced in December that its customers would soon be able to purchase ETH through its service, and it revealed it was working on a MetaMask Web wallet integration.
In its SEC filing, PayPal emphasised it meticulously keeps records of customer’s crypto data:
We maintain the internal recordkeeping of our customers’ crypto assets, including the amount and type of crypto asset owned by each of our customers.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Source: https://cryptodaily.co.uk/2023/05/paypal-holds-close-to-1b-crypto-for-its-customers