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PayPal Permanently Bans Account of Crypto Trader and Locks Funds for 180 Days

UTC by Steve Muchoki · 3 min read
PayPal Permanently Bans Account of Crypto Trader and Locks Funds for 180 Days
Photo: Shutterstock

The Redditor accused PayPal of maliciously closing his account and having incompetent staff members who are not up to date with the crypto industry. 

A few weeks after the maiden crypto entry, payment giant PayPal Holdings Inc (NASDAQ: PYPL) has been reported to have biased reviews from cryptocurrency traders. According to a Redditor and crypto trader by the name ‘TheCoolDoc’, PayPal has permanently closed his US-based account for suspicion of money laundering. As a result, he will not be in a position to access his funds, approximately $462, for the next six months.

The Case between PayPal and the Crypto Trader

According to the Redditor, PayPal’s system flagged his account after his weekly activity spiked from his past six-year usual activity.

In a bid to rescue his longtime account and locked assets, the Redditor agreed to comply with the reviewing board. “My account recently got limited and asked for like 10 explanations of “sales” which all were cryptocurrency dip buys and high sells (as is normal) all within a period of one week,” TheCoolDoc wrote.

Apparently, PayPal’s system flagged his account on suspicion he was selling items worth $10,000 in a week. Having submitted the requested document for review, including ID, and other personal identification documents, he thought the company would reconsider its prior decision to limit his account capabilities.

Notably, a limited PayPal account is capable of transacting particular payments. It was a day after submitting his personal documents and conducting long calls with one of PayPal’s assistants that he was told the decision to permanently close his account is final and irrevocable.

“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.” The usual PayPal’s statement after permanently closing a user account.

The Redditor accused PayPal of maliciously closing his account, and having incompetent staff members who are not up to date with the crypto industry.

“I just spent 40 minutes on the phone with a nice lady (Jennifer) on PayPal’s phone and went through our transaction history/activity, tons of explanations of crypto terms (since she didn’t know PayPal even has crypto) and I basically begged for the account back, but still no luck because apparently you cannot appeal a final reviewed decision,” the Redditor further explained.

Although the assistant finally came to understand that he was involved in crypto day trading with the company, there was nothing extra to be done as the decision is final.

In a bid to save other unsuspecting crypto traders using PayPal services, the Redditor opted to highlight his ordeal with the company through social media platforms for different news outlets to publish it.

The case is rather complicated as PayPal might have a cause for worry due to increased crypto scams, and identifying real from fake might be rather challenging. However, the company needs to put mechanisms to avoid putting legitimate crypto traders under unnecessary pressure especially with the anticipated crypto rally that might see heightened activity in the industry.

Cryptocurrency news, News
Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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