PayPal Reveals Huge Cryptocurrency Holdings Worth $541 Million, Everything You Need to Know.

PayPal Reveals Huge Cryptocurrency Holdings Worth $541 Million, Everything You Need to Know.

 Global payments giant PayPal will hold $604 million worth of cryptocurrencies for its customers by the end of 2022, with bitcoin and Ethereum accounting for nearly 90%.

 According to its annual report to the US Securities and Exchange Commission (SEC), PayPal held $291 million in BTC, $250 million in ETH, and $63 million in Litecoin and Bitcoin Cash as of December 31, 2022.

 

The company’s crypto holdings stood at $604 million at the end of 2022, down slightly from the $690 million the company held as of September.

 The decline comes amid a slide in crypto prices and soaring user confidence in the industry following the disastrous collapse of cryptocurrency exchange FTX.

 PayPal’s crypto holdings amount to 67% of the company’s total financial liabilities, which stood at $902 million as of December 31.  As per the filing, the company had total financial assets of more than $25 billion.

PayPal launched a service allowing US-based customers to buy and sell specific cryptocurrencies in October 2020.

 The company has since expanded the service to the UK, with plans for more international expansion.

 Notably, this is the first time the payments giant has included a breakdown of its crypto holdings, as its crypto assets were not disclosed in its previous annual financial reports.

 In the filing, PayPal stated that it felt the need to include a breakdown of its crypto holdings due to recent developments in the industry.  It wrote:

 “Due to the unique risks associated with cryptocurrencies, including technical, legal and regulatory risks, we recognize a crypto asset protection obligation to reflect our obligation to protect crypto assets held for the benefit of our customers.”

 PayPal further elaborated that they store customers’ digital assets through third-party custodians.  The company noted that the custodian is contractually required to segregate client assets and not mix them with proprietary or other assets:-

 “We cannot be certain that these contractual obligations, even if duly observed by the custodian, would be effective in preventing such assets from being treated as part of the custodian’s property under bankruptcy or other insolvency law.”

Meanwhile, PayPal CEO Dan Schulman revealed last week that he is leaving the company by the end of the year.  Schulman, who will remain a member of PayPal’s board, has led the online payments firm since its split from eBay in 2015.

 PayPal also had to take some measures to reduce costs amid the current global market flux.  More recently, the company said it had reduced its workforce by 7%, or approximately 2,000 employees, as part of its ongoing effort to “consolidate” and “reorganize” in a “challenging macro-economic environment”.  Have given.