Online payment network PayPal has withdrawn a recent policy change that sought to impose a fine of $2,500 on its users for spreading “misinformation.” PayPal claimed that the policy update went “out in error.”
The company was forced to retract the policy after the decision received significant social media backlash from the crypto community. David Marcus, CEO of Bitcoin-based startup Lightspark, and PayPal’s former president, took to Twitter, raising his voice against the policy update. Part of Marcus’ tweet noted how it is “insanity” for a private company to decide to take its user funds if the customer says something they disagree with. Following Marcus’ tweet, Tesla chief executive Elon Musk said he concurred with Marcus and said PayPal was in the wrong here.
Along with Marcus and Musk, Maple Finance co-founder Sid Powell also made comments on the incident, explaining to users that this is why they need to have custody over their own funds. He tweeted that “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.”
The policy that was mistakenly published noted that PayPal’s list of prohibited activities also included “the sending, posting, or publication of any messages, content, or materials” that “promote misinformation” or “present a risk to user safety or wellbeing.” If caught doing the same, users will face a penalty of $2,500, which will directly get deducted from their accounts.
Taking cognizance of the community backlash, a PayPal spokesperson reversed the company’s recent policy update and asserted that the Acceptable Use Policy notice which recently went out was “in error that included incorrect information.” He further confirmed that “PayPal is not fining people for misinformation”.