In my opinion, PayPal in using seller holds as a cash flow management tool. Literally, as many have already suggested, PayPal appears to be floating seller funds. They are using seller money to prevent having to use their own money to prevent payment friction. Paypal rationale for holds on seller funds: "In an effort to reduce payment friction with cryptocurrency, holds may be placed on transactions related to the buyer sending payments to our cryptocurrency vendor. In other words, it is necessary for us to hold funds from the cryptocurrency seller while we wait for the buyer funds to clear." Payment friction is a real concept, related to making it as easy as possible to buy something online. Paypal is seemingly trying to say that they allow buyer transactions to process despite holds and make up for the potential deficits caused by buyer holds by holding seller funds. Lesson learned over-and-over again is to avoid PayPal at all cost.
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