PayPal had $565 million in cryptocurrencies at the end of 2022

PayPal, the global payments giant, has offered a significant portion of its financial obligations in cryptocurrencies such as Bitcoin to its customers.

PayPal puts most of its money into Bitcoin

As of December 31, PayPal had a total of $604 million invested in various cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and Bitcoin Cash, according to its annual report filed Feb. 10 with the U.S. Securities and Exchange Commission.

Of PayPal’s crypto assets, Bitcoin is the largest, valued at $291 million in the company’s asset breakdown. Ethereum is held for $250 million, while the remaining $63 million consists of Litecoin and Bitcoin Cash combined.

Cryptos are held by an external custodian

As of December 31, PayPal’s total financial assets exceeded $25 billion, according to its filing with the US Securities and Exchange Commission. PayPal’s holdings in cryptocurrencies, which stands at $604 (€565) million, make up 67% of the company’s total financial liabilities, amounting to $902 (€844) million.

Although PayPal introduced cryptocurrencies to its platform more than 2 years ago, the company did not include a similar breakdown of its crypto holdings in its previous annual financial report. PayPal wrote the following in a recent filing:

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

According to PayPal’s filing, customers’ cryptocurrencies are held by a third-party custodian. The company emphasizes that there is a contractual requirement that the custodian segregates client assets from other assets or property and adds the following:

We cannot be certain that these contractual obligations, even if duly performed 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 laws .

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