PayPal, a leading global payment provider, ended 2022 with $604 million worth of cryptocurrencies in its possession, primarily consisting of Bitcoin and Ethereum, which made up almost 90% of the total figure. The company reported to the U.S. Securities and Exchange Commission (SEC) that it held $291 million in BTC, $250 million in ETH, and an additional $63 million in Litecoin and Bitcoin Cash as of December 31st.
Despite holding $604 million in crypto assets at the end of 2022, this figure represents a decrease from the $690 million the company held as of September, due to the recent drop in cryptocurrency prices and loss of trust in the industry after the collapse of cryptocurrency exchange FTX. The $604 million in crypto holdings accounts for 67% of PayPal’s total financial liabilities, which amount to $902 million as of December 31st. The company’s total financial assets were reported to be over $25 billion, according to the filing.
PayPal started offering its U.S.-based customers the ability to buy and sell selected cryptocurrencies in October 2020 and has since expanded the service to the UK with plans for further international growth. This is the first time PayPal has included a breakdown of its crypto holdings in its annual financial report, previously not disclosing its crypto assets. The company stated that due to the unique risks associated with cryptocurrencies, it felt the need to include the breakdown of its crypto holdings to reflect its obligation to protect its customers’ digital assets.
PayPal stores its customers’ digital assets through a third-party custodian and contractually requires the segregation of customer assets from its own assets to prevent them from being mixed. However, the company noted that it cannot guarantee that these contractual obligations will be upheld in the event of the custodian’s bankruptcy or insolvency.
The CEO of PayPal, Dan Schulman, recently announced that he will be leaving the company by the end of the year, but will remain a member of its board. The company has also had to make cuts to its workforce, reducing it by 7% or around 2,000 employees, in an effort to strengthen and reshape its operations in the current challenging economic environment.
