PayPal: goodbye to the policy of punishing users for incorrect information

PayPal: goodbye to the policy of punishing users for incorrect information - paypal how it worksPayPal claims that its policy of punishing users for incorrect information was "a mistake".

Despite the retraction, the cryptocurrency community affirmed the importance of the policy on the matter. This is a perfect example of why decentralization and self-custody of funds are so important in this industry.

A look back at the € 2500 fine

The online payment network PayPal backed down on a controversial policy that could have seen users fined up to $ 2.500 for spreading "false information." The payment platform claims that the policy update was posted "by mistake".

Becker News CEO announced on Twitter: "In a twist, Paypal tells us that its $ 2.500 misinformation violation was actually misinformation."

The disinformation clause contained in PayPal's Acceptable Use Policy (AUP) has now been withdrawn. The entry into force was scheduled for November 3. Furthermore, it would have expanded the list of prohibited activities to include "the posting, publication or dissemination of any message, content or material" that "promotes disinformation". This raises the question of internet privacy.

PayPal then stated that the updated AUP clause was released in error and included incorrect information, stating that it would not fin its users for disclosing incorrect information:

"PayPal does not fine people who spread false information and this fine has never been included in our policy […] Our teams are working to correct our policy pages." We are sorry for the confusion this has caused ”.

PayPal Defenders

Not everyone saw PayPal's now withdrawn clause as harmful to its users. Chief strategy officer Meltem Demirors, of digital asset investment firm CoinShares, said that, in any case, companies have the right to choose who can use their services without providing explanations:

"And if you think cryptocurrencies are immune, you are naive or deliberately ignorant," he added:

"Currently, 31% of Ethereum's post-merger blocks are OFAC compliant, which means they censor transactions associated with specific contracts and addresses on a state sponsored list."

While applying a fine is a first for PayPal, this isn't the payment giant's first political move. The company had in fact cut ties with domain registrar Epik in October 2020. The latter provided services to the Proud Boys (a neo-fascist organization) and other conservative groups.

Like the stock market in general, PayPal (PayPal shares - ticker PYPL) fell 64,65% in the past 12 months, according to Yahoo Finance.

NASDAQ is scheduled to reopen on September 10 at 9:30 am Eastern Time. It therefore remains to be seen whether the clause and its subsequent retraction will have an impact on PayPal's share price.