Buyers of non-fungible tokens (NFTs) using PayPal will no longer be protected for large sales, the California-based global FinTech announced.
Starting March 21, NFT sales of more than $10,000 will no longer be eligible for Seller Protection, according to PayPal’s updated policy. The rule protects seller transactions from chargebacks, reversals and fees.
NFTs, which are artificially scarce digital objects created by using blockchain technology to mint unique versions of anything that can be digitized, have become the latest craze for celebrities, including Snoop Dogg and former New England Patriots quarterback Tom Brady.
Brady’s prowess as a CEO and branding power came in December, when Autograph did a drop and auction of nearly 17,000 NFTs. “Live Forever: The Tom Brady Origins Collection” sold out in minutes, with fans, collectors and speculators grabbing up certified images at starting at $80 each.
Julian Lennon has turned some memorabilia from his father, John Lennon, and Paul McCartney into NFTs, pitching them to Beatles fans as the opportunity to “own a piece of music history.”
See more: Hey Jude, Don’t Burst the Bubble
In December, Ozzy Osbourne, the former Black Sabbath front man, announced the launch of an NFT collection called CryptoBatz, a reference to the 1982 concert when he bit the head off a bat.
The NFT collection features 9,666 unique digital bats that can “bite” other collectable NFTs, including avatars from the Bored Ape Yacht Club, SupDucks and CryptoToadz.
The Seller Protection program, as the name suggests, provides merchants a way to fight back if a buyer falsely claims they did not receive an item, or if payment is made by a hacked account. NFTs have been linked to fraud.
PayPal did not explain in the announcement why it is making the change. It only said that if PayPal users decline, they must close their PayPal account prior to the effective date.