The global payment giant PayPal has a significant part of its financial liabilities in cryptocurrencies such as Bitcoin (BTC) that it offers to its clients.
As of December 31, PayPal held a total of USD 604 million in various cryptocurrencies such as Bitcoin, Ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH), according to the annual report filed with the Securities and Exchange Commission (SEC). United States on February 10.
Bitcoin has the largest share of PayPal’s crypto assets, with $291 million in the firm’s asset breakdown, while $250 million is held in ETH.. The remaining 63 million include Litecoin and Bitcoin Cash combined.
The amount of PayPal’s cryptocurrency holdings represents 67% of the company’s total financial liabilities, which amounted to USD 902 million as of December 31. PayPal’s total financial assets were more than $25 billion, according to the filing.
Despite introducing cryptocurrency to its platform more than two years ago, PayPal did not include a similar breakdown of cryptocurrency holdings in its previous annual financial report.
“Due to the unique risks associated with cryptocurrencies, including technological, legal, and regulatory risks, we recognize a crypto asset safeguard liability to reflect our obligation to safeguard crypto assets held for the benefit of our customers,” PayPal wrote in the recent filing.
PayPal stores its customers’ cryptocurrencies through a third-party custodian, the company noted in the filing.. PayPal noted that it contractually requires the custodian to segregate our clients’ assets and not commingle them with its own or other assets, adding:
“We cannot be sure that these contractual obligations, even if duly observed by the custodian, will be effective in preventing such assets from being treated as part of the custodian’s estate under bankruptcy or other insolvency law.”
As previously reported, PayPal debuted its Bitcoin holding and selling service in the United States in November 2020. The company has been doing its best to bring all possible blockchain and cryptocurrency integrations to its services, including digital currencies. of the central bank, according to the vice president. Ricardo Nash.
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