PayPal Freezes Crypto Purchases for Luxembourg Users Amid CARF Compliance

PayPal has put its cryptocurrency purchases on hold for users in Luxembourg due to new tax reporting requirements. The freeze, which started on June 25, 2026, affects only new purchases of Bitcoin and other digital assets through PayPal's platform in the European country.

The reason behind this pause is a new international tax framework called CARF (Crypto-Asset Reporting Framework), developed by the Organisation for Economic Co-operation and Development. Luxembourg has incorporated CARF into its local law, which requires companies facilitating crypto transactions to collect detailed customer information before processing new buy orders.

According to PayPal, users who already hold cryptocurrencies in their accounts can continue to sell or manage those assets but cannot add to them until the necessary systems are built out. The company expects to resume crypto purchases by the end of 2026, giving itself six months to comply with the new regulations.