Fintech giant PayPal held, as of December 31, 2022, a total of $604 million in various cryptocurrencies on behalf of its customers, including Bitcoin ($BTC), Ethereum ($ETH), Litecoin ($LTC), and Bitcoin Cash ($BCH).
The holdings were revealed in its annual report, filed with the U.S. Securities and Exchange Commission (SEC). The lion’s share of PayPal users’ cryptocurrency holdings were in the flagship cryptocurrency Bitcoin, with BTC accounting for $291 million in the firm’s assets. $250 million were held in ETH, while $63 million were held in LTC and BCH.
Also read: How to Transfer Crypto From Coinbase to PayPal and Vice-Versa: A Step-by-Step Guide
PayPal noted that its cryptocurrency holdings accounted for 67% of its total financial liabilities, which amount to $902 million at the end of the year, as Cointelegraph reported. The company’s total financial assets stood above $25 billion. This is the first time PayPal included a breakdown of cryptocurrency holdings in its filing, despite launching its crypto features back in October 2020.
In its filing, PayPal wrote:
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 stored with a third-party custodian, which it stressed is contractually required to separate customer assets and ensure they are not combined with the company’s own assets or any other assets.
PayPal added that the effectiveness of these contractual obligations may be in preventing assets from being considered as part of the custodian’s estate in the event of bankruptcy or insolvency cannot be guaranteed, even if the custodian adheres to these obligations.
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