According to a report by CrytoSlate, payment giant PayPal stated in an email sent to some users on August 14 that it would temporarily suspend cryptocurrency purchase services in the UK in the next few months.

PayPal to suspend cryptocurrency purchases in UK

The message states that the service will be suspended starting October 1, 2023, and is expected to resume in early 2024, but the exact time of restoration is still unclear. Although purchases are not possible, PayPal said users will be able to continue to hold or choose to sell their cryptocurrencies during the outage. PayPal assures users that their cryptocurrency is safe and says there will be no additional fees for holding it.

PayPal will launch cryptocurrency services in the UK in August 2021. PayPal's UK customers can buy, sell and hold BTC, ETH, BCH and LTC through the PayPal website or mobile APP. But these purchased cryptocurrencies can only be used within its app, and users cannot transfer cryptocurrencies to other wallets.

As stated in its terms of service, PayPal only provides customers with the ability to buy, sell, and hold cryptocurrencies. Customers do not receive actual cryptocurrency, but only the rights to the cryptocurrency, which are held through arrangements with other PayPal group companies and third-party providers of crypto services. In other words, the cryptocurrencies that customers buy and sell are held on behalf of PayPal and its manufacturers, which is why users cannot transfer their cryptocurrencies.

Are the new FCA rules too harsh?

In June this year, the UK approved the Financial Services and Markets Bill 2023 (FSMB), giving and expanding the power of relevant authorities to regulate cryptocurrencies and stablecoins. The Financial Conduct Authority (FCA), which is responsible for regulating the conduct of the financial market, protecting consumers and promoting financial stability, has also taken many actions recently. In addition to introducing a 24-hour cooling-off period for first-time investors and prohibiting referral bonuses, it also issued a letter to remind Cryptoasset companies comply with financial promotion regimes or face criminal charges. The order, which takes effect from October 8, also covers overseas companies selling their products to UK customers.

PayPal said it will suspend cryptocurrency purchases due to new rules introduced by the UK's Financial Conduct Authority (FCA). The company said the rules would require it to implement additional steps before customers can purchase cryptocurrencies.

Judging from this point in time, PayPal may be preparing relevant processes to comply with the new regulations to avoid being punished after the new system is launched.