An article on Cointelegraph [2] reports that PayPal keeps its customers' cryptocurrencies through the use of a third-party custodian. The company emphasized in the filing that it has a contractual agreement in place with the custodian mandating the segregation of customer assets and prohibiting their mix with the custodian's proprietary or other assets. However, PayPal stated that they cannot guarantee the effectiveness of these contractual obligations in the event of the custodian's bankruptcy or insolvency.
I hope people will read those reports and be aware better about high risks if they use Paypal to buy cryptocurrency and store their cryptocurrency with Paypal accounts.Not your keys not your coins. It is true for Paypal and Paypal users too. Both Paypal and Paypal users don't have keys of cryptocurrency and what Paypal users get is only a digital number credited to their accounts. The actual cryptocurrency amount is hold by a third-party custodian company, not Paypal.
Risk to see the contract broken by that third-party custodian company is real. You can use Paypal to buy cryptocurrency if you don't want to use other platforms but withdraw your cryptocurrency to your non custodial wallets instantly after your deal on Paypal is done.
