LocalBitCoins/PayPal Cash Card Code paying more for BTC?


#1

I was browsing through Localbitcoins.com and noticed a few buyers that pay a huge premium for BTC using PayPal Cash Card Codes. There were a some with 1000+ positive feedback paying over $450 per BTC using PayPal Cash Card why would they do this?


#2

Because they don’t want to get or can’t get a verification at the normal places.


#3

And they are able to do chargebacks with paypal. Localbitcoins regards paypal as a high risk payment method.


#4

I would understand that if they were regular localbitcoins customer, I have people all the time that buy from me on there that say I didn’t want to go through all the hassle of CoinBase etc. I make about $25 over exchange price and that’s the end of story. But these guys are buying 100’s of BTC in a month. One guy boasts over $1 million USD a month he purchases. And his feedback has +1000’s
@headrush No the PayPal cash card is different then actual PayPal, no chargebacks it’s a prepaid card only.


#5

So they use it to transport money out of the country without anybody able to trace it. Or for that matter for any other illegal stuff.


#6

See that’s what I thought, it must be some type of money laundering or something to avoid being tracked.


#7

I just can’t imagine someone buying all the cards to do this with. The max you can load is $500 with a $3.95 fee on each card. Plus you are paying $200+ over Exchange price per BTC Sounds strange to me. But we had an old PayPal account we have not used for a while, and sold 1 BTC for $449 I had the code in a few minutes and released the escrow after I posted the code to my account. The money was in my PayPal account in 30 secs. Hopefully it won’t get my account flagged or me arrested, lol
Full disclosure this was a test and for educational purposes only. :smile:


#8

For educational and testing purposes only, you could create a few paypal accounts and multiply your BTC holdings significantly round-robining that cash you just made.


#9

Probably not worth the hassle, as atleast in the US they are starting to looking into BTC and money laundering much more closely.

Being flagged and investigate for money laundering is not worth the premium over normal BTC price.
The only reason someone would pay so much is because of hiding illegal activity…


#10

Launder that money honey…


#11

Lack of options, most likely. Selling drugs is a cash business, yet you’ve somehow got to get that money back to your suppliers in other countries. Banks, money transfers, etc. are out in the US, because they’re monitored and regulated. Hand-carrying cash is subject to limits as well. You could smuggle it out (and the business of smuggling cash out of the US is almost as big as smuggling drugs in), but there’s a lot of risk involved.

Or, you could buy magic Paypal gift cards, and turn them into BTC. :smile: