Account Locked After Buying Cryptos from Paypal

[KelvinM40]

I’ve been using Paypal possibly for as long as 20 years, always using it for small dollar transactions, usually for things purchases off eBay.  However I recently discovered that cryptocurrecnies could be purchased with PayPal so I started doing that and wound up putting about $11K into Bitcoin and Ethereum.  I was aware that you can’t take delivery of the coins – that you have to let Paypal hold them in your account for you – but I was assuming that Paypal must be bound to the same rules about protecting customers’ funds as any other financial institution would be.  But now I’m getting worried, because after trying to but another $900 of crypto and the transaction didn’t go through, instead I got a notification from PayPal saying “Your account access is temporarily limited” which effectively means that my account is locked and I can neither take my money out nor use my account to make purchases from thirds parties.  PayPal asked from some documents to confirm my identity – which I supplied immediately – but three days later I still haven’t heard anything from them.

I’m guessing that the reason that my transitions might have looked suspicious to PayPal might have been as because I was connecting to Paypal with a VPN and that VPN may have caused traffic from me to be coming from a range of IP address that they have marked as ‘suspicious’.  However I am just guessing that’s the reason – since PayPal hasn’t been communicative I can only guess about what’s going on and for how long they intend to hold my money.

[KelvinM40]

I thought that I had this resolved. I talked to a PayPal agent on the phone who was very helpful and took the limitations off my account while were were still on the phone.  The agent wasn't sure why my account was flagged but it seemed as though she cleared the issue.  Unfortunately though, as soon as I hung up and tried to sell my cryptos the limitations went back on my account and I'm back to square one.  Google searches tell me that other users are having problems too, that if your crypto trades are large than transactions that you have historically done with your PayPal account that you'll have limitations put on your account.  This seems very strange, almost as if PayPal went into the cryptos business without making sure that they had the infrastructure to support it.  I guess that my next step is going to call to call them back again when they open for business in the morning and try to get the account limitations removed again and then sell my cryptos while I still have the agent on the phone.

[Love20]

I am trying to withdraw all my money. For the huge fees, this is a major hassle and now I can’t even get my money out. I am selling my PayPal stock also.

[KelvinM40]

I;m back to waiting another 3 to 5 days for the results of their investigation.  An additional phone call resulted in no satisfaction.  At first it seemed  a little reassuring that it is possible to get a real person on the phone the only problem is that those real people don't seem to have any power to resolve issues. 

[Love20]

I think PayPal will need to expand their customer service with cryptocurrency. They will lose some customers the first time they try to sell

[KelvinM40]

That’s assuming that they didn’t design their crytocurrency business with the intention of making it difficult for people to take their money out. 

At a minimum, what they need to do is fix their algorithms that detect “suspicious” activity.  Their current algorithms seem to treat buying cryptos as being no different than buying things on eBay.  So if the history of your account had been that you use a few times per year to buy small items and then you suddenly start buying $1000 worth of bitcoin at a time, their algorithm sees that as a big change of behavior, marks it as suspicious, and puts limits on your account that prevent you from selling the Bitcoins that you just bought.

[HeyRed]

I had $200 in my PP account.  I bought $100 of Eth and requested a transfer from my bank of $12 so I could buy $100 of Bitcoin.  My account was limited after that.  I provided the required information to get my account "fixed".  All was fine until a week later when I requested about $100 from my bank.  I got a 2nd limitation on my account.  I just gave them the info they wanted and hope to get access again soon.

I've been a PP customer for over 20 years.

Very frustrating in terms of wasting a customer's time having to submit info to PP plus not being able to use your PP account.

PP needs to improve their "criminal activity" algorithms or I am going to sell my crypto and go elsewhere.  😞

[neronicki]

Start sending certified mail return receipt requested. PayPal Litigation Department, 2211 North First Street, San Jose, Ca <removed pin code>. Notify your VPN provider of the problem they created. Notify the community how dangerous it is to use PayPal to buy crypto. PayPal is a publicly company. No other financial institution  will  do this. Use the bully pulpit to air your concerns, PayPal has competition from well know financial houses. I f their system is flawed and they don't fix it. That's their problem not yours. 

[KelvinM40]

I finally managed to get my money out.  It turned out that Paypal considers one of my PCs to be a "trusted device" if (and only if) I don't use a VPN.  And when I connected to my account using a trusted device Paypal would allow me to sell my cryptos. 

Another infuriating thing that I encountered when trying to resolve this is that when they don't lock your account completely, if you're not using a "trusted" device when you try to sell you cryptos it will prompt you to enter a telephone number for them to verify your identity and it will not accept a Google Voice number even if that Google Voice number is already registered as your account's primary phone number.  It appears as though they want a brand new phone number and it can't be a VOIP number.  I'm guessing that they want to SMS you a security code to you for you to enter, but I can't for the life of me figure out why they can't SMS it to the phone number that's already on file for your account and why they don't give you the option to have the code sent my email rather than by SMS.  Since I don't have a phone number other than my Google Voice number, I'm not sure how I would have ever gained access to my money if I had not discovered that one of my PCs was a 'trusted' device and used that device to take my money out.

Yet a third strange thing that I encountered is that after selling my cryptos Paypal put a 3 day hold on the money before I could withdraw it to my bank account, even though I was trying to transfer the money to the same bank account that was used to fund the cryptos purchase in the first place.  In this case I didn't care that I had to wait three days as I didn't need the money right away, but it doesn't seem right that they would be putting  a hold on the money at all.  The reason for doing so must just be to take advantage of the float.

[dnsigma69]

The problem is their explanation of trusted devices and VPNs are not valid. I am having exactly the same problem, always login from the same device and don't use a VPN. Therefore, that part of their explanation is just hogwash.