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Not long ago, PayPal entered the cryptocurrency market by integrating bitcoin and other major crypto assets on its payment platform.
The leading payment processor announced last month that it would allow its users to buy and sell cryptocurrencies from their PayPal accounts. The company also plans to allow its users to make payments from their crypto accounts across over 26 million merchants globally.
The crypto industry saw it as a massive development as it promises to expose cryptocurrencies to mainstream users. However, despite the positive news for crypto, there’s the problem of censorship, a concept that’s against Bitcoin’s principles.
It’s barely two weeks since PayPal opened the floodgate to allow eligible U.S. customers to use the new service. But reports have started surfacing about account limitations and permanent bans, something PayPal is very good at.
A Redditor took to Reddit today to lament about how PayPal permanently banned his account for no good reason other than he bought and sold cryptocurrencies with his 6-year old PayPal account.
While warning other users to beware, the user, u/TheCoolDoc, said that PayPal treated the buy/sell crypto transactions as “item sales,” a term he described as “ignorance fueled misunderstanding.”
The Redditor claimed that his account got flagged by Paypal because the company thought he made 50+ buy/sell transactions within a week when it was just regular crypto trading.
PayPal: We Decided To Limit Your Account Permanently
After noticing his account has been flagged, he submitted the action for review, alongside his photo ID. He then called the company for further inquiry.
Surprisingly, u/TheCoolDoc said he received an email from PayPal saying,
“After a review, we’ve decided to permanently limit your account due to potential risk. You’ll not be able to conduct any further business using PayPal.”
Now he has to wait for 180 days before he can access the $462 in the account.
The post, which has now garnered over 200 comments, soon sparked a long thread of angry crypto enthusiasts.
One user said, “This is why I don’t trust PayPal and their centralized design. They already suck with eBay transactions. How does crypto make it any different for them? You can already see people buying crypto and getting banned from them for some really dumb sh**t and them kicking you off and keeping your crypto.”
Another commented, “Jeez, who’d have thought buying and selling crypto on a centralized service that crypto was originally meant to replace was a bad idea! In all seriousness, it sucks, man, but don’t use PayPal.”
While some users were quick to demolish the platform, others said they enjoyed using Paypal but wouldn’t use it for crypto transactions.
u/TheCoolDoc’s account suspension is just one of the many reasons why it’s not a good idea to store your crypto on PayPal.