PayPal is gearing up to revise its Non-Fungible Tokens (NFT) transaction protection policies.
According to recent updates on its terms and conditions page, PayPal is slated to modify its Seller Protection Program, explicitly excluding NFT transactions amounting to $10,000 or more starting May 20.
The amended terms, unveiled on March 21, disclose that PayPal will cease to offer buyer protection for NFT purchases, and transactions exceeding the $10,000 threshold will no longer be shielded against fraudulent claims, chargebacks or other deceptive practices that could financially impact sellers.
This move comes on the heels of PayPal’s earlier decision to restrict support for NFT sellers, despite its previous policy of issuing refunds for misrepresented items and reimbursing sellers affected by payment disputes or fraudulent refund requests.
While PayPal has demonstrated increased involvement with blockchain technology and digital assets, notably with the introduction of cryptocurrency support on its platform in 2022 and the filing of a patent application for an NFT purchase and transfer system promising user royalties, these policy adjustments suggest a cautious approach to the burgeoning NFT market.
Notably, in November, PayPal revealed that it had received a subpoena from the U.S. Securities and Exchange Commission (SEC) regarding its U.S. dollar-tied stablecoin, PYUSD.
As outlined in PayPal’s 10-Q report, the subpoena requested document production, with PayPal affirming its cooperation with the SEC’s inquiry.