PayPal is set to alter its protection policies for NFT transactions, marking a striking shift from its previous support for the tokens.
According to its terms and conditions page, the payment giant is changing the parameters of its Seller Protection Program to exclude Non-Fungible Tokens (NFTs) with a transaction amount of $10,000 or above starting on May 20.
The updated terms surfaced on March 21, revealing that PayPal will no longer cover NFT purchases under its buyer protection policy. Additionally, NFT sales exceeding $10,000 will not be protected against false claims, chargebacks, or other scams that could financially harm sellers.
The development follows an earlier limitation of support for NFT sellers by PayPal, despite previously offering refunds for falsely advertised items and reimbursement for sellers impacted by payment disputes and fraudulent refund requests.
PayPal’s growing engagement with blockchain technology and digital assets has been evident, especially with the rollout of cryptocurrency support on its platform in 2022 and a patent application for an NFT purchase and transfer system promising user royalties. Yet, these policy revisions suggest a cautious approach to the flourishing NFT market.
In November, PayPal disclosed that it had received a subpoena from the U.S. SEC concerning its U.S. dollar-tied stablecoin, PYUSD. Detailed in PayPal’s 10-Q report, the subpoena sought the production of documents, and PayPal stated it had cooperated with the SEC’s inquiry.