Leading payments processor PayPal has told its UK customers that it will suspend cryptocurrency purchases through its platform from 1 October.

The suspension, which is expected to be lifted in “early 2024, comes as PayPayl looks to comply with new rules and regulations surrounding cryptocurrencies and their promotion.

The UK’s Financial Conduct Authority (FCA) is set to introduce tough curbs on the advertising of cryptocurrencies to British consumers on 8 October. The watchdog will force crypto firms to carry warnings about the risk of investing in tokens like Bitcoin and Ethereum, while also introducing a mandatory 24 hour ‘cooling off’ period for first-time crypto investors.

Another major part of the new regulation will outlaw ‘refer a friend’ bonuses which have been likened to pyramid or multi-level marketing schemes. Such incentives can be utilised by businesses to turn their customers into recruiters.

PayPal, which first introduced crypto buying and selling in the UK in 2021, emailed customers this week stating: "PayPal consistently works closely with regulators around the world to adhere to applicable rules and regulations in the markets in which we operate.”

Account holders will be able to hold and sell crypto “at any time” but purchases will be suspended until early next year.

Despite this news, all signs point to PayPal doubling down on crypto. The company earlier this week announced the appointment of Alex Chriss as its new chief executive from 27 September, replacing Dan Schulman who has served in the role since 2014. Chriss currently serves as senior vice president and chief product officer of small businesses for Intuit. A continued push into crypto, including a new Cryptocurrencies Hub where users can manage crypto assets, is thought to be high on the agenda for the incoming chief exec.

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