Breaking: Pay Pal Shutting Down Bitcoin-Related Accounts

Bitcoin If you have a Pay Pal account and you’re selling anything Bitcoin-related be prepared to get a warning email from the online payment juggernaut. Starting in mid-January Pay Pal began what looks to be a widespread crack-down on any Bitcoin-related activity on their platform. A member of popular BitcoinTalk.org shared his own experience:

“I got called from paypal because i sold a few casascius coins (no issues with the transaction itself, buyers all happy).  But the lady said because i sold bitcoin my account is now under review for a perm ban. I stated i have been selling since early 2013 with no issues, and it’s perfectly legal within ebay they even created a new category called virtual currency for it. 

But she could careless just reading off a script, but I managed to get it out of her it’s some new policy they are now implementing against bitcoin. She doesnt really even understand what it is, as long as the auction has the word bitcoin in it, over certain $ amount, and buyer paid with paypal, you are at risk getting the hammer.  If you check online many similar stories in the last month or so.” (Source – BitcoinTalk.org)

Here’s the worst part, along with shutting down your account Pay Pal also freezes funds in your account which could be a major bummer if you store a meaningful amount of money in your Pay Pal account.

Now for the silver lining, there’s no better sign of how popular Bitcoin is getting if huge, well-established companies like Pay Pal are starting to get scared. What does this mean for you? If you have a Pay Pal account and are doing anything Bitcoin-related don’t be surprised if you get a warning. You’ll get one and only one and then, poof, bye bye Pay Pal account.

While this might be a short-term fix for Pay Pal it is clear that they have a bigger problem looming ahead and canceling their customer’s account isn’t a great long-term solution.

Photo Credit: btckeychain via Compfight cc

{ 12 comments… add one }

  • Michael February 4, 2014, 9:14 pm

    What do you mean you only get one Paypal account I am pretty sure I have a bunch of them lol but I have been using them since 2002. I should have bought some bitcoin miners when I first read about you talking about bitcoins at $40. Next time I guess lol I did think the bitcoins where fake but now I fill like I am missing out on something cool!

  • Crypto Names February 4, 2014, 9:29 pm

    Thanks for the article. Glad to see bitcoin finally breaking into the domain industry.

    In Ebay’s most recent 10-K they publicly disclosed “services which help merchants accept virtual currencies” (e.g. Bitcoin) as competition.
    http://www.sec.gov/Archives/edgar/data/1065088/000106508814000010/ebay201310-k.htm

  • Bitcoin Cloud Mining February 4, 2014, 11:17 pm

    It looks like these activities are related to PayPal accounts that are associated with Ebay.

    Do you have any information regarding non-Ebay associated bitcoin accounts are affected?

  • MikeFX February 5, 2014, 12:32 am

    I thought Paypal was a eBay company. It seems strange to me that Paypal is enforcing this new rule, even after eBay said they would now accept Cryptos in their classifieds section. I have a feeling they are unsure what to do with the emergence of Cryptos and such. It might be a short term rule as they figure out what to do in the long term. Beats me…Please keep us updated. I’m following your blog now. Thanks.

  • Mike February 5, 2014, 12:45 am

    Wow, this is so mixed up, ebay just opened virtual currency category…

  • Nuno February 5, 2014, 1:33 am

    How can Paypal ban accounts for this, while Ebay promote it, when Paypal is an Ebay company? Doesn’t make any sense.

  • Joe February 5, 2014, 1:36 am

    This too must have a stricter control relationship between companies and government agencies around the online world because anyone with power is permissible act on the system of payments and collections.

    Now Ebay, then who else bandwagon, I smell that soon we will have 1000 new payment gateways and sending money as an example of reference to more than 1000 new extensions to be to come ..

    PayPal is like the dot-com.

    Here the problem is that developments in tableting technology is fired from the hands of others to do business anywhere which can then cause serious problems in some of us, the Internet today be uncontrollable.

  • Karl Jackson February 5, 2014, 4:01 am

    After Paypal, probably Visa, MasterCard, Feds and the Worldbank.

  • Donny February 5, 2014, 5:18 am

    I had 3 different bids on miners yesterday and I got an email about all of them being cancelled. I knew something was about to happen.

  • Jorge Pinkus Parada February 5, 2014, 9:24 pm

    I see the reason very easily: Bitcoin poses a [great, so better ban it now] threat to Paypal, but it’s another [possibly great, so they don’t want to miss the early boat] way of earnings for eBay.

  • Domainer February 7, 2014, 4:33 pm

    I accept Bitcoin payments at my website and hope that will not have problems with PayPal because of that. I don’t like PayPal at all, but you must have it when you are in online business. Bitcoin could become really huge in the next few years and I hope PayPal will become small and disappear when people adopt Bitcoin. PayPal threats their clients like garbage. So many times they frozen someones account because of nothing. You cant even speak with them, they constantly repeating nonsenses.

  • Bitcoin Trader February 17, 2014, 11:39 am

    I think it depends on how its related to bitcoin. Is it transactional, informational, etc. I know plenty of places selling bitcoin information and software using paypal. We’ll see – definitely don’t leave too much in your balance!

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