PayPal had a total of $604 million in different cryptocurrencies on behalf of its clients as of December 31, 2022, including Bitcoin ($BTC), Ethereum ($ETH), Litecoin ($LTC), and Bitcoin Cash ($BCH).
The holdings were disclosed in the company’s annual report, which was submitted with the Securities and Exchange Commission in the United States (SEC). The majority of PayPal users’ cryptocurrency holdings were in Bitcoin, the firm’s main cryptocurrency, which accounted for $291 million in assets. $250 million was invested in ETH, while $63 million was invested in LTC and BCH.
Also see: How to Transfer Crypto from Coinbase to PayPal and the Other Way Around: A Step-by-Step Guide.
According to Cointelegraph, PayPal’s cryptocurrency holdings accounted for 67% of its entire financial liabilities, which totaled $902 million at the end of the year. The overall financial assets of the corporation exceeded $25 billion. Despite debuting its cryptocurrency services in October 2020, this is the first time PayPal has disclosed a breakdown of its cryptocurrency holdings in its disclosure.
PayPal’s petition stated:
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.
The firm’s digital assets are held with a third-party custodian, who is legally mandated to segregate client assets and guarantee they are not merged with the company’s own assets or any other assets, according to the company.
PayPal stated that, even if the custodian abides by these contractual requirements, the effectiveness of these contractual obligations in preventing assets from being treated as part of the custodian’s estate in the event of bankruptcy or insolvency cannot be guaranteed.
