Paypal, the leading fintech company, had a portfolio of cryptocurrencies worth $604 million for its clients as of December 31, 2022. The digital assets included Bitcoin ($BTC), Ethereum ($ETH), Litecoin ($LTC), and Bitcoin Cash ($BCH).
This information was made public in the company's annual report submitted to the U.S. Securities and Exchange Commission (SEC). The majority of the cryptocurrency holdings of PayPal users were in Bitcoin, with $291 million worth of assets. Ethereum was second with holdings worth $250 million, followed by Litecoin and Bitcoin Cash with $63 million combined.
According to Cointelegraph, PayPal reported that its cryptocurrency assets accounted for 67% of its total financial obligations, which were estimated at $902 million at the end of the year.
Crypto Globe reports that, the company's total financial assets were recorded above $25 billion. This marked the first occasion when PayPal disclosed a detailed account of its cryptocurrency holdings in a filing, even though it had introduced its crypto services in October 2020.
Paypal wrote:
"Due to the unique risks associated with cryptocurrencies, including technological, legal, and regulatory risks, we recognize a crypto asset safeguarding liability to reflect our obligation to safeguard the crypto assets held for the benefit of our customers."
PayPal's digital assets are being kept by an external custodian under a contract, which requires the segregation of customer assets and prohibits their combination with the company's own assets or any other assets.
However, the company noted that even if the custodian follows the contractual obligations, the assurance of protection from being considered as part of the custodian's estate in the case of bankruptcy or insolvency cannot be fully guaranteed. [pc]
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