US multinational PayPal has revised its seller protection program to exclude non-fungible token (NFT) transactions over $10,000.
Limiting NFT Transactions
According to PayPal’s Policy Updates page, NFT transactions valued at more than $10,000 are ineligible. The changes will come into effect from March 21 this year.
A more detailed document stated that items or transactions such as art, media, antiques or collectibles, physically or digitally represented by an NFT with a value greater than $10,000 or equivalent value in local currency, as calculated at the time of the transaction, will not be eligible for its seller protection program.
“Revising PayPal’s Seller Protection program to expand the list of ineligible items to include certain Non-Fungible Tokens (NFTs) with a transaction amount of more than $10,000 USD.”
PayPal first announced that it was allowing users in the United States to buy Bitcoin and other cryptocurrencies in October 2020. The following year, the payment processor began allowing users to spend their cryptocurrency holdings, such as Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Litecoin (LTC), at millions of online merchants around the world.
Talking about the “transitional point” of cryptocurrencies, PayPal CEO and president Dan Schulman earlier stated,
“This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or debit card in your PayPal wallet. We believe this is a point where cryptocurrencies move from being a primarily asset class that you buy, hold, and/or sell to a legitimate funding source to transacting in the real world at millions of merchants.
Malicious Actors in NFT Space
PayPal’s move comes less than a week after the US-based NFT marketplace – Cent NFT – halted NFT sales citing rampant fraud and counterfeit digital assets.
CEO Cameron Hejazi called it a “fundamental problem” in the rapidly changing world of digital assets. For the uninitiated, Cent NFT is best known for hosting the auction of a digitized version of former Twitter CEO Jack Dorsey’s first tweet, which was also one of the first NFTs to sell. for over $1 million worth of crypto.
More recently, the tax authorities of the UK – Her Majesty’s Revenue and Customs (HMRC) reportedly seized three NFTs connected to a suspected case of such fraud estimated to be around $1.9 million.
