PayPal users are reporting that their account has been restricted after they traded crypto assets too frequently using the platform.
As per the United States-based Reddit user TheCoolDoc, PayPal sent them a message adding that it had permanently limited their account “due to potential risk.” The user added that it has made a min of 10 crypto transactions every week, purchasing during dips and selling when the worth was high, and PayPal had asked for evidence for every transaction.
“The system flagged my account thinking i used to be selling items worth $10k in one week once I hadn’t done so within the last 6 years I’ve held a PayPal account,” the user added. “I submitted the things for review with my photo ID and wrote ‘PayPal Crypto’ for every crypto transaction because what else could I say?”
In a matter of hours, PayPal reportedly sent a message adding that the user would “not be able to conduct any longer business” using the platform. The user added that the remaining funds within the account – $462 USD – were placed on a 180-day hold, but they have since used other means to withdraw them.
The platform imposed a $10k limit – recently changed to $20k – for crypto purchases made within every week for the U.S. users, a limit the Reddit user denies exceeding.
“I genuinely 100% know I did nothing wrong and it’s a misunderstanding as they think I made 50+ buy/sell transactions within a span of 1 week of things when it’s just crypto,” added TheCoolDoc.
While on 12th Nov., PayPal announced that it would permit eligible users within the U.S. to use cryptocurrencies for trading and payments. Reddit user Cryptix001 also reported such similar issues with the platform handling crypto transactions:
“I told them I was using PayPal to transfer money from one among my online accounts to my main bank account [Coinbase to checking] to bypass the longer withdrawal time. I had never had an issue doing this until it had been a bigger sum of cash that I needed to pay some bills. It took them a nerve-wracking week before they finally agreed to release my funds. I’ll never use PayPal again.”
However, the platform’s policy adds that it charges no transaction fees for users purchasing or selling cryptocurrency until the year 2021, and there are not any fees for holding crypto assets. Reddit user bit tablet suggested a partial explanation for PayPal’s actions might be that it loses money with users conducting high-volume trades.