A redditor’s friend got this internal company email today:

Clarification on Bitcoin merchants using PayPal 6/10/2013 8:58 AM (-05:00) Impacted market: EMEA

We’ve received a number of escalations regarding Bitcoin merchants using PayPal. Any merchant seeking to sell or buy Bitcoins with PayPal is operating as a financial exchange. Please be aware that Financial Exchange merchants are prohibited unless pre-approved by PayPal. This process involves getting VP approvals from both Risk and Compliance, and only licensed financial institutions are considered.

Merchant contacts

If we receive contacts on Bitcoin sales, instead of escalating further, kindly advise customers that they need to be licensed financial institutions to be considered for approval. However, there are some acceptable cases, as outlined below.

Acceptable Bitcoin business models for PayPal

Merchants with a business model that is related to Bitcoin but does not sell Bitcoins may be acceptable. For example: Merchants offering Bitcoin education packages Merchants selling computer hardware designed specifically for mining Bitcoins. In this case, kindly ensure that the merchant isn’t pre-selling and actually has the equipment ready to deliver.

Please note – All Bitcoin-related e-commerce should be considered high risk.

source: http://www.reddit.com/r/Bitcoin/comments/1g23w2/paypal_email_to_employees_policy_regarding_bitcoin/