PayPal Discloses Near $1B Crypto Holding in 10-Q SEC Filing

Online payment giant PayPal revealed in a 10-Q SEC filing on Tuesday that it holds nearly $1 billion in crypto assets in its custody. The voluminous crypto assets held by PayPal came as a surprise to investors because the financial services company is a relatively new player in the crypto space, having allowed digital asset services in 2020.

PayPal indicated it holds $943 million in customer crypto assets, mainly in Bitcoin and Ether. The electronic payment service provider revealed it has $499 million of Bitcoin (BTC), $362 million of Ether (ETH), and little fragments of Bitcoin Cash (BCH) and Litecoin (LTC).

A 10-Q filing is a mandatory quarterly financial report that the Securities and Exchange Commission requires of all public companies in the US. Financial declarations in a 10-Q filing are usually unaudited.

10-Q Shows Increased PayPal Crypto Exposure

The quarterly report by PayPal showed it had increased its crypto bag from the previous quarter despite regulatory uncertainties around the digital asset market. The online payment giant reported that as of March 31, it has a $339 million increase in crypto assets in its custody from the previous year.

PayPal, however, does not hold cryptocurrency other than its customer’s assets, according to its quarterly financial declarations. The company also does not keep custody of the assets but keeps them with a third-party custodial service.

“We maintain the internal recordkeeping of our customers’ crypto assets, including the amount and type of crypto asset owned by each of our customers,” PayPal noted in the quarterly update.

Safety Amidst Regulatory Uncertainties

The financial service providers assured customers that despite the unclear regulatory situation in the US, it would safeguard their crypto assets. As per its terms and conditions, PayPal stated that it would protect clients’ assets from unauthorized purchases and sales. It also noted it would repay customers of any unauthorized assets transfer for a lifetime cap of $50,000.

The Venmo owners have taken measures to safeguard customers’ crypto assets, including keeping them with third-party custodians. PayPal noted that the third-party custodian keeps the assets in a custodial account in PayPal’s name for the benefit of PayPal’s customers