PayPal, the global payment behemoth, has a major portion of its financial liabilities in cryptocurrencies such as Bitcoin that it offers to its users.
According to the annual report filed with the United States Securities and Exchange Commission on Feb. 10, PayPal held a total of $604 million in various cryptocurrencies as of Dec. 31, including Bitcoin, Ether, Litecoin, and Bitcoin Cash.
Bitcoin accounts for the majority of PayPal’s crypto assets, accounting for $291 million in the firm’s asset breakdown, while ETH accounts for $250 million. The remaining $63 million is made up of Litecoin and Bitcoin Cash.
PayPal’s crypto holdings account for 67% of the company’s overall financial liabilities, which totaled $902 million as of December 31. According to the declaration, PayPal’s total financial assets exceeded $25 billion.
Despite the fact that it first accepted cryptocurrencies on its platform over two years ago, PayPal did not offer a similar breakdown of crypto holdings in its prior annual financial report.
In a recent filing, PayPal stated that it “recognizes a crypto asset safeguarding duty to reflect our obligation to secure the crypto assets held for the benefit of our customers due to the specific risks associated with cryptocurrencies, including technological, legal, and regulatory concerns.”
According to the company’s petition, PayPal uses a third party custodian to keep clients’ cryptocurrency. PayPal emphasized that the custodian is obligated by contract to keep client assets separate from proprietary or other assets, adding:
“We cannot be certain 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.”
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