In a move that has largely gone unnoticed, PayPal is making changes to its buyer and seller protection policies, specifically targeting transactions involving non-fungible tokens (NFTs).

Effective May 20, PayPal will no longer extend buyer protection to purchases of NFTs. This means that buyers will no longer be covered by PayPal's buyer protection policy for transactions involving NFTs. Additionally, NFT sales exceeding $10,000 will no longer be backed by PayPal's seller protection program, which previously offered safeguards against false claims, chargebacks, and other potential scams that could result in financial losses for sellers.

While PayPal announced its intentions to modify its protection programs for NFT-related transactions on March 21, the changes have largely flown under the radar until now. The updates to PayPal's Purchase Protection Program and Seller Protection Program were disclosed on its policy updates page, signaling a shift in the company's approach to NFT transactions.

Previously, PayPal provided support for both buyers and sellers involved in NFT transactions, offering refunds to buyers for misrepresented items and reimbursing sellers for losses incurred due to payment disputes or fraudulent refund requests. However, with these latest changes, PayPal is scaling back its protections for NFT transactions, aligning its policies more closely with the unique risks associated with digital assets.

This move comes amid PayPal's increasing interest in blockchain technology and digital assets. In recent years, the company has demonstrated its commitment to embracing cryptocurrencies, allowing users to buy, sell, and hold digital currencies on its platform. Additionally, PayPal filed a patent application in 2022 for an NFT purchase and transfer system designed to offer users royalties and other incentives, indicating its exploration of opportunities within the NFT space.

While PayPal has yet to comment on the rationale behind these policy changes, the adjustments signal a shift in the company's approach to NFT transactions, reflecting its evolving stance on digital assets and blockchain technology.