Global payments giant PayPal will hold $604 million worth of cryptocurrencies for its customers by the end of 2022, with bitcoin and ethereum accounting for nearly 90%.
As of December 31, PayPal held $291 million in BTC, $250 million in ETH, and another $63 million in Litecoin and Bitcoin Cash. according to its annual report for the US Securities and Exchange Commission (SEC).
The company’s crypto holdings at the end of 2022 stood at $604 million, down from the $690 million held by the company as of September. The decline comes amid a slide in crypto prices and soaring user confidence in the industry following the disastrous collapse of cryptocurrency exchange FTX.
PayPal’s crypto holdings amount to 67% of the company’s total financial liabilities, which stood at $902 million as of December 31. As of the filing, the company had total financial assets of more than $25 billion, according to the filing.
PayPal launched a service allowing US-based customers to buy and sell specific cryptocurrencies in October 2020. the company has since Extended service in the UKMore international expansion is planned.
Notably, this is the first time the payments giant has included a breakdown of its crypto holdings. Of earlier The annual financial report did not disclose its crypto assets. In the filing, PayPal stated that they felt the need to include a breakdown of its crypto holdings due to recent developments in the industry. It wrote:
“Due to the unique risks associated with cryptocurrencies, including technical, legal and regulatory risks, we recognize a crypto asset security obligation to reflect our obligation to protect crypto assets held for the benefit of our customers.”
PayPal further elaborated that they store customers’ digital assets through third-party custodians. The company noted that custodians are contractually required to segregate client assets and not mix them with proprietary or other assets:
“We cannot be certain that these contractual obligations, even if duly observed by the custodian, would be effective in preventing such assets from being treated as part of the custodian’s property under bankruptcy or other insolvency law.”
Meanwhile, PayPal CEO Dan Schulman revealed Last week that he is leaving the company by the end of the year. Schulman, who will remain a member of PayPal’s board, has led the online payments firm since its split from eBay in 2015.
PayPal also had to take some measures to reduce costs amid current global market movements. Recently the company Said It has reduced its workforce by 7%, or about 2,000 employees, as part of its ongoing effort to “consolidate” and “reorganize” in a “challenging macro-economic environment”.
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