PayPal has revised its seller protection program to exclude NFT transactions that exceed $10,000. This comes as the NFT market is experiencing several issues related to scams.
Payments platform PayPal has revised its policies, affecting NFT transactions. Under the new rules for the seller protection program, NFT transactions over $10,000 will be ineligible. The change will come into place on March 21, 2022.
Among the items ineligible under the seller protection program are items represented by NFTs, including art, media, antiques, and collectibles in physical or digital form. The change comes after numerous instances of malicious activity in the NFT space, which is seeing bad actors finding ways to dupe the system.
Recently, U.K. tax authorities seized NFTs linked to a suspected case of NFT fraud estimated to be about $1.8 million. NFT scams, in general, are varied and plentiful, so many platforms have urged users to be wary of them.
PayPal added crypto to its services last year, and the move was widely seen as a step forward for the crypto market. There were some initial restrictions, such as not being able to move the assets off the platform. But PayPal has steadily been opening up to more crypto-related offerings.
Crypto itself has been growing in usage β bitcoin processed 62% more transactions than PayPal in 2021. Rather than compete with it, the likes of PayPal and Visa are incorporating aspects of the technology. For instance, these two firms have invested in a $300 million Blockchain Capital Fund.
NFT market growing, but platforms taking note of needed improvements
The popularity of NFTs has been accompanied by several negative developments, much like other niches in the market in the past. From thefts to wash trading, bad actors will take any opportunity to prey on the uninformed. Copyright infringement has become another major issue the market is dealing with right now.
The U.S. Treasury Department has also expressed concern that NFTs can be used to launder money. So far, only the Thai SEC has banned NFTs.
To combat these developments, NFT marketplaces are working on various solutions. This has not always worked out well, however, as OpenSea had to reverse a free NFT minting limit following a backlash.
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