Global payment giant PayPal had $604 million worth of cryptocurrency for its customers at the end of 2022, with Bitcoin and Ethereum accounting for nearly 90% of that number.
PayPal had $291 million in BTC, $250 million in ETH, and another $63 million in Litecoin and Bitcoin Cash as of December 31. according to its annual report to the United States Securities and Exchange Commission (SEC).
The company's cryptocurrency holding of $604 million at the end of 2022 is down from the $690 million the company had in September. The drop comes amid plummeting cryptocurrency prices and exacerbating user confidence in the industry following the disastrous collapse of cryptocurrency exchange FTX.
The amount of PayPal's cryptocurrencies represents 67% of the company's total financial liabilities, which amount to USD 902 million as of December 31. According to the filing, the company's total financial assets amounted to more than $25 billion, according to the filing.
PayPal introduced the service that allows US-based customers to buy and sell specific cryptocurrencies in October 2020. Since then, the company extended service to UKand plans for further international expansion.
Notably, this is the first time the payments giant has included a breakdown of its cryptocurrency holdings, as its former The annual financial report did not disclose its crypto assets. In the filing, PayPal said that it felt the need to include the breakdown of its cryptocurrency holdings due to recent developments in the industry. He wrote:
"Due to the unique risks associated with cryptocurrencies, including technological, legal and regulatory risks, we recognize a crypto asset safeguarding responsibility to reflect our obligation to safeguard crypto assets held for the benefit of our clients."
PayPal further detailed that they store customers' digital assets through a third-party custodian. The company noted that it contractually requires the custodian to segregate client assets and not commingle them with proprietary or other assets, adding:
"We cannot be sure 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."
Meanwhile, PayPal CEO Dan Schulman revealed last week that he will leave the company at the end of the year. Schulman, who will remain a PayPal board member, has led the online payments firm since it parted ways with eBay in 2015.
PayPal also had to take some steps to cut costs amid the ongoing global market downturn. Recently, the company saying It has reduced its workforce by 7%, or about 2,000 employees, as part of its ongoing effort to "get stronger" and "reform" in a "challenging macroeconomic environment."
