April 4, 2014 5:53 PM

eBay Adds Virtual Currency Category To US Site, For Real This Time

Today, eBay revealed their category changes for the month of April.  Near the bottom of the list due to the intentional use of the word ‘virtual’ instead of ‘digital,’ the “Virtual Currency Category” is under the Paper Coin and Money subcategory of the Collectibles & Art section.  Under the Virtual Currency Category are three more categories: Miners, Mining Contracts, and “Currency.”  Despite these new categories, there are still tens of thousands of digital currency related auctions and listings on eBay that have not been properly re-categorized.  Make no mistake that eBay had been waiting for the IRS’s Virtual Currency Guidance to come out before they added their Virtual Currency Category.  Unfortunately, at this time neither eBay nor PayPal are accepting Bitcoin, though some see this as a step towards that direction.
Under the Currency subcategory of Virtual Currencies, you will find only classified ads.

eBay Across The Pond
In the United Kingdom, starting February 10th,  Bitcoin related auctions were no longer allowed in eBay’s Auction or Buy-It-Now listings and are to be delegated solely as classified ads, this stance was taken by eBay on both sides of the pond.  This was the first time that we say eBay use the word “virtual currency” in its official policy and the first time that “virtual currency” appeared as an official category: but only in the classifieds section.  It seems that they are trying different approaches in different areas of the world, likely to reflect the differing regulatory climates surrounding Virtual Currencies.  Since the January news of UK eBay’s decision, nothing new has come out of eBay’s UK market.  However, HMRC did release a new tax ruling regarding Bitcoin and virtual currencies in March that abolished the restrictive voucher treatment.  I expect the UK’s eBay to follow the US’s eBay soon.
Bitcoin’s Arduous History With eBay
Bitcoiners have been wary of eBay virtual currency sales for several years now.  In years past, the premium on Bitcoins on eBay would be over 200%, yet still newcomers to the Bitcoin sphere would consider buying them.  This August 2013 article from Pando highlights one blogger’s experience losing hundreds of dollars trying to “arbitrage” via eBay.  However, in the months since, there have been scattered reports of users that have sold Bitcoins and other virtual currencies through eBay actually winning their seller protection cases once the inevitable paypal/CC/bank  chargeback occurred.
This is important because it seems that eBay and Paypal are now recognizing Blockchain evidence.  If you sell Bitcoin via eBay and the buyer sends you his Bitcoin address via eBay’s messaging system (which all buyer/seller communications are required to go through) then Blockchain evidence of a transaction to that address for the amount promised is now evidence in a buyer/seller protection case on an auction or buy-it-now sale.  The fact of the matter is, Blockchain evidence of a Bitcoin transaction is the hardest evidence that the fraud team at Paypal/eBay has ever seen.  It’s about damn time that they recognized that. eBay’s move to push all actual virtual currency currency listings to “classified ads” reveals that they are currently content with side stepping the issue of seller/buyer protection altogether though.

Caleb Chen @bitxbitxbitcoin

Caleb is a graduate of the University of Virginia where he studied Economics, East Asian Studies, and Mathematics. He is currently pursuing his MSc in Digital Currency at the University of Nicosia.