PayPal says policy to punish users for misinformation was “a mistake”.
Despite the retraction, the crypto community has declared the importance of politics in the field. This is indeed a perfect example of why decentralization and self-custody of funds are so important in this sector.
Rollback on the fine of 2500 €
The PayPal online payment network has returned to a controversial politics which could have seen users fined $2,500 for spreading “misinformation”. The payment platform claiming that the policy update has been released”by mistake“.
In a major plot twist, @PayPal is claiming its new policy to fine users $2,500 per infraction for “misinformation” is, in fact… “misinformation.”
— Kyle Becker (@kylenabecker) October 9, 2022
The CEO of Becker News announced on Twitter:In a twist, Paypal tells us that its $2,500 misinformation violation was, in fact, misinformation.”
PayPal’s Acceptable Use Policy (AUP) disinformation clause is now retracted. It was to come into force on November 3. Additionally, she reportedly expanded the list of prohibited activities to include “sending, posting or broadcasting any message, content or material” who “promote misinformation“. This raises the issue of privacy on the internet.
PayPal has since stated that the updated PUA clause was mistakenly released and included incorrect information, stating that it would not impose no fine to its users for disseminating erroneous information:
“PayPal does not fine people who spread false information and this fine was never intended to be included in our policy. […] Our teams are working to fix our policy pages. We are sorry for the confusion this has caused.“
Crypto-assets are a risky investment.
A controversy on the web
This news spread like wildfire on Twitter. Among crypto and non-crypto watchers, some continue to comment on the change of course even after the retraction.
David Marcus, CEO of Lightspark and former president of PayPal, called “madness” the fact “that a private company can now decide to take your money if you say something they don’t approve of.”
Elon Musk, CEO of Tesla and former co-founder of PayPal, responded to David Marcus’ tweet with “Okay.”
The co-founder of Maple Finance, Sid Powell, said the case in question is a textbook case that shows why it is essential to have control of your own funds. The entrepreneur also refers to “self custody” for privacy rights.
PayPal is a good example of why you need to custody your own funds. Your finances used to be decoupled from free speech. Now custodying your own funds is the only way to safeguard that right for yourself
— Sid Powell (🥩 🥞) (@syrupsid) October 9, 2022
The founder and managing director of the Eight cryptocurrency advisory and education platform, Michaël van de Poppe simply stated: “end of PayPal, buy #Bitcoin“.
The end of PayPal.
Buy #Bitcoin.— Michaël van de Poppe (@CryptoMichNL) October 9, 2022
PayPal Defenders
But not everyone considered that PayPal’s now retracted clause was harmful to its users.
1/ loving the rage over @PayPal‘s attempt to censor users, but financial censorship has been the reality for marginalized communities (sex workers, political orgs, niche subcultures, dissidents, etc) forever and isn’t new
see @EFF circa 2016https://t.co/GJXABjGTW0
— Meltem Demiror (@Melt_Dem) October 9, 2022
Strategy Director Meltem Demirorsof digital asset investment firm CoinShares, said that companies have the right to choose who can use its services without explanation :
“And if you think crypto is immune, you’re either naive or willfully ignorant“, she said, adding:
“Currently, 31% of post-merger Ethereum blocks are OFAC-compliant, meaning they censor transactions associated with specific contracts and addresses on a state-sponsored list.”
While the implementation of a fine would have been a first for PayPal, the payment giant is not its first blow in terms of policy. He had indeed cut ties with the domain registrar Epik in October 2020. The latter provided services to the Proud Boys (neo-fascist organization) and other conservative groups.
Like the stock market in general, PayPal (PYPL) has dropped 64.65% in the past 12 monthsselon Yahoo Finance.
NASDAQ is scheduled to reopen September 10 at 9:30 a.m. EST. So it remains to be seen whether the clause and its subsequent retraction will have any impact on PayPal’s share price.
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