The United States Consumer Financial Protection Bureau is investigating PayPal’s Venmo after the company received a civil investigative demand from the authority. According to reports, the Bureau has alleged that the digital wallet company conducted “unauthorized fund transfers and collections processes.”
The civil investigative demand from the CFPB was originally made on January 21.
In 2020 PayPal announced that its users can purchase Bitcoin, Ethereum, Litecoin, and Bitcoin Cash through its platform. In order to allow users to use Venmo services to avail crypto assets. PayPal received a conditional license from the New York State Department of Financial Services (NYDFS), at the time.
PayPal Holdings Inc said on Friday that it was cooperating with the U.S. consumer watchdog regarding this civil investigation.
The team stated that user activity on its network increased especially after the company introduced its crypto-friendly policies. Allowing its customers to buy, sell, and store digital currencies. According to its fourth quarter and fiscal year report. There were around 16 million active accounts on the platform in Q4 of 2020.
PayPal To Introduce Crypto To Venmo
PayPal planned to introduce the crypto integration service to its Venmo app this year. Additionally, in the coming months, users of Venmo will also be able to buy, hold and sell crypto in the app.
Venmo has been a part of PayPal since 2013. When PayPal acquired it as part of its $800 million purchase of startup Braintree. In Q4 of 2020, Venmo processed around $47 billion in total payments volume, which is up around 60% from the prior year.
This is also not the first time the CFPB has investigated PayPal. Back in 2015 it was forced to refund $15 million as well as pay a $10 million fine for illegally signing up customers for its online credit product, PayPal Credit, which was formally known as Bill Me Later.
