Most of the crypto portfolio of the giant company founded by Elon Musk was made up of BTC and ETH, the company held $291 million of the former and $250 million of the latter at the end of 2022.
PayPal keeps a significant part of its financial obligations in cryptocurrencies, such as bitcoin, which it also offers to its customers. As of Dec. 31, the company held a total of $604 million in various digital assets, primarily bitcoin, ether, litecoin and bitcoin cash, according to its annual report filed with the U.S. Securities and Exchange Commission on Feb. 10.
The largest proportion of PayPal’s cryptocurrency assets is BTC, which accounts for $291 million of the total assets, while $250 million is held in ETH. The remaining $63 million includes Litecoin and Bitcoin Cash combined.
Incidentally, the company’s crypto portfolio accounts for 67% of its financial liabilities, which totaled $902 million as of December 31. Of course, PayPal’s total assets are much larger than that, currently reported to be $25 billion.
Users’ crypto may be at risk if the custodian goes bankrupt
PayPal stores customers’ cryptocurrencies through a third-party custodian, the company noted in the report. The company emphasized that it is stipulated in the contract that the custodian must separate the clients’ assets and must not mix them with its own or other assets. However, the company added that a possible bankruptcy might pose a serious problem for PayPal:
“We cannot be certain that these contractual obligations, even if properly complied with by the custodian, will effectively prevent such assets from being treated as part of the assets of the custodian under bankruptcy or other insolvency laws.” – can be read in PayPal’s report.
By the way, PayPal is already Offered since November 2020 bitcoin holding and trading services in the United States. According to vice president Richard Nash, the company is doing everything possible to introduce all possible blockchains and cryptocurrencies into its services, including central bank digital currencies.
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