PayPal Removes Buyer And Seller Protections For NFTs

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PayPal is quietly stripping buying and selling protections for non-fungible token-related (NFT) transactions in a partial reversal of its previous policy, according to the firm’s little-noticed terms-of-service update. Under the new policy, effective May 20, NFT purchases will no longer be covered by PayPal’s buyer protection policy. Additionally, NFT sales worth more than $10,000 will no longer be backed by the company’s guarantee against false claims, chargebacks, or other scams that may cause sellers to lose money. “Given the uncertainty around proof of order fulfillment and other variables in this evolving industry, we are no longer providing buyer protection and are limiting seller protection for NFTs,” a PayPal spokesperson told The Block.

The company published a notice about its plans to stop providing protections for some NFT-related transactions on March 21, its website shows. But, until now, those changes have remained unreported. “Effective May 20, 2024: We are revising PayPal’s Purchase Protection Program to exclude from eligibility: Non-Fungible Tokens (NFTs),” PayPal said on its policy updates page under the section “Amendments to PayPal’s Purchase Protection Program.”In its “Amendments to PayPal’s Seller Protection Program,” Previously, NFT purchases and sales were initially backed by PayPal’s buyer and seller protection programs, although the company later limited its support for the tokens’ sellers. The former program refunded buyers for falsely advertised items paid for with PayPal, while the latter reimbursed sellers who lost money to payment disputes and fraudulent refund requests, according to the platform’s website. In recent years, PayPal has shown subtle signs of its growing interest in blockchain-based digital art and digital assets. In 2022, PayPal rolled out support for cryptocurrencies on its main platform. That same year, the company also filed a patent for an NFT purchase and transfer system that would offer users royalties, among other rewards, a PayPal patent application shows. 

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Bitcoin price fell 3% on April 16 as crypto investors entered a risk-off mode amid stagnating ETF demand. Bitcoin joined U.S. stock indexes in heading lower on the day, as the U.S. dollar Index reached a six-month-high of 106.17. On April 15, capital flows into the spot Bitcoin exchange-traded funds (ETFs) recorded $36.7 million in net outflows, according to data from Farside Investors. Placing emphasis on the slowing inflows into the spot Bitcoin ETFs, Farside Investors data revealed that only Grayscale and BlackRock have had flows on Friday, April 12, and Monday, April 15, as every other fund recorded zero flows. The latest report by CryptoQuant also reveals that demand growth for Bitcoin from ETFs in the U.S. has slowed down. Meanwhile, an earlier report by Cointelegraph revealed that Bitcoin whales were holding onto their coins despite the recent ongoing drawdown in BTC price. Young Ju’s observations corroborate this, showing that accumulation has increased despite the tapering spot Bitcoin flows. The support level is at $61,800, and the resistance level is at $65,500.

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