PayPal eliminates safeguards for NFT transactions
PayPal is making changes to its protection policies for NFT transactions, signaling a significant departure from its previous support for the tokens.
According to the company’s terms and conditions, PayPal will modify its Seller Protection Program to exclude NFTs with a transaction amount of $10,000 or more, starting on May 20.
The updated terms were revealed on March 21, stating that PayPal will no longer provide buyer protection for NFT purchases. Furthermore, NFT sales exceeding $10,000 will not be safeguarded against false claims, chargebacks, or scams that could harm sellers financially.
This move follows a previous restriction on support for NFT sellers by PayPal, despite previously offering refunds for misrepresented items and reimbursement for sellers affected by payment disputes and fraudulent refund requests.
PayPal has been increasingly involved in blockchain technology and digital assets, evident in its introduction of cryptocurrency support on its platform in 2022 and its patent application for an NFT purchase and transfer system that promises user royalties. However, these policy changes indicate a cautious approach to the thriving NFT market.
In November, PayPal disclosed that it had received a subpoena from the U.S. Securities and Exchange Commission (SEC) regarding its U.S. dollar-tied stablecoin, PYUSD. The subpoena, detailed in PayPal’s 10-Q report, requested the production of documents, and PayPal stated that it had cooperated with the SEC’s inquiry.
