Why does Square hold funds for cryptocurrency transactions?

10 answers

• Dec 15, 2021 · 3 years ago
  Square holds funds for cryptocurrency transactions as a security measure. Cryptocurrency transactions are often irreversible, and there is a risk of fraud or chargebacks. By holding funds, Square can ensure that there are sufficient funds to cover any potential losses or disputes. This practice helps protect both the buyer and the seller.
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• Dec 15, 2021 · 3 years ago
  The reason Square holds funds for cryptocurrency transactions is to mitigate the risk of volatility. Cryptocurrencies are known for their price fluctuations, and by holding funds, Square can protect itself from sudden price drops. This ensures that both parties involved in the transaction are not affected by market volatility.
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• Dec 15, 2021 · 3 years ago
  Square holds funds for cryptocurrency transactions to comply with regulatory requirements. As a financial institution, Square is subject to anti-money laundering (AML) and know your customer (KYC) regulations. Holding funds allows Square to perform necessary due diligence and ensure compliance with these regulations.
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• Dec 15, 2021 · 3 years ago
  Square holds funds for cryptocurrency transactions to provide a seamless user experience. By holding funds, Square can facilitate instant transactions and avoid delays caused by waiting for confirmations on the blockchain. This improves the overall efficiency and convenience of using cryptocurrencies for payments.
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• Dec 15, 2021 · 3 years ago
  Square holds funds for cryptocurrency transactions to prevent potential money laundering or illegal activities. By holding funds, Square can monitor and analyze transactions for any suspicious or fraudulent activities. This helps maintain the integrity of the cryptocurrency ecosystem and ensures a safe environment for users.
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• Dec 15, 2021 · 3 years ago
  Square holds funds for cryptocurrency transactions to manage liquidity. Cryptocurrency markets can be highly volatile, and by holding funds, Square can ensure that it has sufficient liquidity to facilitate transactions. This helps prevent any disruptions or delays in the processing of cryptocurrency payments.
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• Dec 15, 2021 · 3 years ago
  Square holds funds for cryptocurrency transactions to provide additional security for both buyers and sellers. Cryptocurrencies are often targeted by hackers, and by holding funds, Square can implement additional security measures to protect user funds. This includes measures such as multi-factor authentication and cold storage of funds.
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• Dec 15, 2021 · 3 years ago
  Square holds funds for cryptocurrency transactions to comply with tax regulations. By holding funds, Square can accurately report and calculate any applicable taxes on cryptocurrency transactions. This helps ensure that users are in compliance with tax laws and avoids any potential legal issues.
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• Dec 15, 2021 · 3 years ago
  Square holds funds for cryptocurrency transactions to prevent potential fraud or scams. Cryptocurrencies have been associated with fraudulent activities, and by holding funds, Square can perform necessary checks and verifications to prevent unauthorized transactions. This helps protect both the platform and its users from financial losses.
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• Dec 15, 2021 · 3 years ago
  Square holds funds for cryptocurrency transactions to provide a seamless integration with its existing payment infrastructure. By holding funds, Square can easily convert cryptocurrencies into fiat currencies, allowing merchants to accept cryptocurrency payments without the need for additional integrations or conversions.
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