Confusion, anger fuel fallout to reported PayPal misinformation fine

Payment service PayPal has cleared up confusion over reported plans to subject users to a $2,500 fine for misinformation. The plans were included in an acceptable use policy, or AUP, the company said was published in error.

“PayPal is not fining people for misinformation and the language was never intended to be inserted into our policy,” PayPal said. “Our teams are working to correct our policy pages. We’re sorry for the confusion this has caused.”

The idea of instituting a misinformation fine drew the ire of the so-called PayPal mafia, made up of former PayPal president David Marcus, founding chief operations officer David Sacks and cofounder Elon Musk. All three responded to the news on Twitter over the weekend.

“It’s hard for me to openly criticize a company I used to love and gave so much to. But @PayPal’s new AUP goes against everything I believe in,” Marcus tweeted Saturday. “A private company now gets to decide to take your money if you say something they disagree with. Insanity.”

Musk replied to Marcus’ tweet saying “agreed.” Sacks quote tweeted Marcus’ tweet telling people “get your money out of PayPal right now.”

The crypto community also used the errored AUP to make a point, describing misinformation fines as more evidence of the need for decentralized, digital payment alternatives. Bitcoin and crypto proponents have long argued allowing companies to run payments system risks giving them too much power over people and how they spend their money.

“PayPal censoring speech and blocking payments is the best thing that has happened for the adoption of crypto payments with stablecoins,” prominent crypto investor Santiago Roel Santos tweeted. “At this rate, web3 adoption will happen more because of the reckless actions of web2 companies.”

MarketWatch, Forbes and Axios contributed to this report.