It was a great news that Paypal is officially in crypto, the community excitement took the major coins to spike in market, specially the ones who will have support on the platform like Bitcoin, Bitcoin Cash, Ether and Litecoin, but not all are good news for the users. In the US the Paypal users are able to buy, sell and Hodl crypto and in 2021 the service will be expanded for more than 210 locations with more than 300 million customers, but they can't withdraw the crypto acquired on the platform, the funds in crypto can only serves on their network of 28 millions of merchant across the globe.
A PayPal user in the US claims that the service has restricted his account for buying and selling crypto using their own service. Paypal is a third party entity who Hodl currency on the behave of their users but since it implantation the service have been banning several accounts, which isn't new, and this adventure come to prove that this automated flag service will be a major issue to crypto.
According to the user, who also hold a reddit account with the username u/TheCoolDoc, said that Paypal blocked his account at the platform without further notice stating that he "no longer will conduct any operation on the platform", the company said that permanently banned him to access their service and his limited account will hold the funds on it for 180 days. Using the notes from the Paypal user it's clear to note that he was buying crypto dip and sell when the price was high, for his surprise Paypal demanded explanation for each transaction made by him on the platform, then limited the account and he no longer will be able to use the service.
The user even contacted the staff team to report the issue but nothing came from that as can see on his own words here:
“The system flagged my account thinking I was selling items worth $10,000 in one week when I hadn't done so in the last 6 years I’ve held a PayPal account,” the user said. “I submitted the stuff for review with my photo ID and wrote ‘PayPal Crypto’ for each crypto transaction because what else could I say?”
The user also denies that exceeded the limit of $20,000 minimum threshold to buy and sell crypto weekly, which is imposed by the company and he 100% sure that did nothing wrong to have the service banned from him.
This isn't an isolated case like this, after posting this issue with PayPal on reddit another user also stated that had problems with the Paypal crypto service, and stats that the service took a whole month to get it fixed and get his money back, this user claims that he will never use the service again. Paypal announced the "open gates" to crypto in US on November 12 and caused a huge welcome by enthusiasts, but also raised concerns with their policy of not "cashing out" for external wallets.
Before using third party entities to hold your crypto it's absolutely necessary to read more about their terms of service as this entities most of the times have trick ways tp deal with their rules. Paypal is know for this kind of tricks and many times they block users accounts without no reason, the appeal to reopen the account is many times denied with the company stating policies that are not known by customers. One thing is true if you don't hold the private keys of your wallet, that wallet isn't yours and that amount also isn't yours...
I see the Paypal service as good to impulse the usage of crypto in a global scale, their network of merchants will be a great catalyst but also comes with a price. The service have a cost and in the future many accounts will be frozen without warning and to recover them will be practical impossible, make sure to check the FAQs before using the service to not cry later.
Don't get trapped...
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paypal is a dangerous platform, no one should use it ever.