Global payment giant PayPal holds a significant part of its financial liabilities in cryptocurrencies like Bitcoin (BTC) offered to its customers.
As of Dec. 31, PayPal held a total of $604 million in various cryptocurrencies including Bitcoin, Ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH), according to the annual report filed with the United States Securities and Exchange Commission (SEC) on Feb. 10.
Bitcoin has the largest share in PayPal’s crypto assets, accounting for $291 million in the firm’s asset breakdown, while $250 million is held in ETH. The remaining $63 million includes Litecoin and Bitcoin Cash combined.
The amount of PayPal’s crypto holdings accounts for 67% of the company’s total financial liabilities amounting to $902 million as of Dec. 31. PayPal’s total financial assets stood at more than $25 billion, according to the filing.
Despite introducing cryptocurrencies into its platform more than two years ago, PayPal did not include a similar breakdown on crypto holdings in its previous annual financial report.
“Due to the unique risks associated with cryptocurrencies, including technological, legal, and regulatory risks, we recognize a crypto asset safeguarding liability to reflect our obligation to safeguard the crypto assets held for the benefit of our customers,” PayPal wrote in the recent filing.
Related: PayPal Xoom adds cross-border remittance on debit card deposit
PayPal stores customers’ cryptocurrencies through a third-party custodian, the company noted in the filing. PayPal stressed that it contractually requires the custodian to segregate our customer assets and not mix them with proprietary or other assets, adding:
“We cannot be certain that these contractual obligations, even if duly observed by the custodian, will be effective in preventing such assets from being treated as part of the custodian’s estate under bankruptcy or other insolvency law.”
As previously reported, PayPal debuted its hold and sell service for Bitcoin in the United States in November 2020. The company has been doing its best to bring all possible blockchain and crypto integrations to its services, including central bank digital currencies, according to vice president Richard Nash.
Source: https://cointelegraph.com/news/paypal-held-604m-in-bitcoin-and-other-crypto-by-the-end-of-2022
