Selling Bitcoin is Against PayPal Policy

[MissouriMiner]

This post is to share info, possibly to help people before they end up in the same situation.

I have been selling Bitcoin for about 5 months with PayPal as the payment processor.  I've been self-employed during this 5 months and have become reliant on Bitcoin-related income.  I've actually been involved with Bitcoin for over 3 years and have saved up quite a few Bitcoin, which I decided to sell when I was laid off.  

Over the 5 months, I've had several disputes which I lost because Bitcoin is not a "tangible item" and not covered under Seller Protection.  I've lost over $2000, which essentially means I had over $2000 stolen from me via fraudulent PayPal charges.  These buyers knew what they were doing and knew they could get away with it. 

On May 10, 2017, I received an email from PayPal stating that the selling of Bitcoin means I was operating as a currency exchange (which includes electronic media/money/currency), which is against the Acceptable Use Policy.  Quote "Per our current Acceptable Use Policy for Money Service Businesses, PayPal may not be used to operate a currency exchange, bureau de change or check cashing business including the sale of bitcoin."

Now I am required to sign an affidavit stating I understand and will comply.  Then they later say they look forward to hearing from me and thanks for choosing PayPal as my business partner.  Well, I just lost my business.

Hope this helps others before they get in too deep. 

[sharpiemarker]

Indeed.

https://www.paypal.com/us/webapps/mpp/ua/acceptableuse-full#prohibited-activities

"You may not use the PayPal service for activities that:

Section 3, h) involve currency exchanges or check cashing businesses"

Don't one have to be licensed in order to exchange currencies generally.  The Internet is slowly but surely becoming regulated so can't do whatever you want no more.

[Jmmaek]

I'm not a tax professional. But bitcoin is property, not currency.  Stop saying it is or your argument has no validity.

IRS Notice 2014-21 declares it is for tax purposes.

Taxpayers need to know the basis in order to compute gain or loss.

IRS takes the position that the value of virtual currencies must be reported in USD and the fair market value is determined on the date of payment or receipt.

[Sphinkter]

Can you PM me?  I'm curious as to if we're both using the same site to ..facilitate..things.

I too just got this whammy from them on my account.

Interesting that Paypal itself doesn't have to abide by its own policies (they do after all, accept bitcoin)...and they're involved in currency exchange. 

read here :

https://www.cryptocoinsnews.com/breaking-paypal-merchants-can-now-accept-bitcoin/

[Whac-A-Mole]

the article is not clear,doyou have to join braintree to use paypal to accept bitcoin

[sharpiemarker]

Perhaps there is a difference with paying with bitcoin for a physical item purchase as opposed bitcoin being the actual "goods" sold or traded.

[Jmeadows]

PayPal needs to stand up and put something out there so all support workers you call on the phone are on the same page half the workers there have no clue to what they are saying or doing about bitcoin.

[Box1]

I'm about to be done with paypal all together & go with someone more knowledgeable in this digital age. Paypal either needs to upgrade or be assimilated.

[wondering101]

I am wondering something, as someone who got ripped off in the opposite direction. I was trying to make a purchase of bitcoin in early July, when surprise surprise the person decided not to send me the coin. I made all the calls befopre hand explaining what bitcoin was to the customer service people to check if I was covered under buyer protection as it was the only way I would make the transaction, and pretty much was told I am fine as long as it wasn't a gaming coin, which they seemed to have trouble understanding. 

After 2 days in the resolution center, and copies of my entire conversation with the seller, paypal closed the case and let the seller keep the funds. 

My only saving grace and I hope it plays out this way is that I used my credit card for the bulk of this purchase and they are hopefully going to cover it under my purchase protection plan.

So do they just side with whoever rips of who, it seems you sellers were left out to dry, and me as a buyer was left unprotected.

[Whac-A-Mole]

@wondering101

there is an outfit called WIREX which helps you buy Bitcoin using Paypal,I have never used it.

But one thing I know is guarantee,protection etc are all moots if the provider has to take big hits,if it is going to hit its bottom line hard,it will find a way to wriggle out of it.