‘Get Your Money Out Right Now’—Elon Musk And PayPal Mafia Lead ‘Insanity’ Backlash Against Shock Blunder That’s The ‘Best Thing’ To Ever Happen To Bitcoin And Crypto
PayPal
PYPL
, the internet payments pioneer cofounded by Tesla billionaire Elon Musk, sparked a huge backlash yesterday with a shock new policy that was quickly reversed.
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The company, after helping to jump-start last year’s huge crypto bull run with its support for bitcoin and a handful of other cryptocurrencies, has scrapped a policy change that would have seen users fined by up to $2,500 for spreading what it called “misinformation,” claiming the update had gone out “in error.”
The reversal followed a flood of accusations from former management and regulators that branded the policy “insane,” “Owellian” and “the best thing that has happened for the adoption” of bitcoin and crypto.
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Tesla billionaire Elon Musk was instrumental in the founding of PayPal and has said the experience … [+] has helped him understand bitcoin and crypto.
Anadolu Agency via Getty Images
“An AUP (acceptable use policy) notice recently went out in error that included incorrect information,” a PayPal spokesperson told reporters. “PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy. Our teams are working to correct our policy pages. We’re sorry for the confusion this has caused.”
However, the company’s change of direction only happened after members of the so-called PayPal mafia, former PayPal president David Marcus, founding chief operations officer David Sacks and cofounder Elon Musk, publically criticized the policy while the bitcoin and crypto community pointed to it as evidence of the need for decentralized, digital payment alternatives.
“It’s hard for me to openly criticize a company I used to love and gave so much to,” Marcus, who now runs “bitcoin-focused” company Lightspark after failing to get Facebook’s digital currency off the ground, posted to Twitter. “But PayPal’s new AUP goes against everything I believe in. A private company now gets to decide to take your money if you say something they disagree with. Insanity.”
“Agreed,” Musk responded to Marcus, while Sacks, now a venture capitalist and cohost of the All In podcast, told PayPal users to “get your money out of PayPal right now.”
The policy was described as “Orwellian” by the Republican commissioner of the Federal Communications Commission, Brendan Carr. “Paypal reserves the right to take your money if you post a message that Paypal decides is “misinformation,” Carr posted to Twitter. “This is why it is so vital that state and federal legislatures pass laws that prohibit discrimination by tech companies and protect free speech.”
Bitcoin
BTC
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.
However, in China, the development of a digital yuan, a so-called central bank digital currency (CBDC), has sparked fears the government will be able to dictate what people can spend their money on. Governments, including in the U.S. and Europe, are exploring the development of their own digital dollar and digital euro CBDCs.
“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.”
Web3 is the idea a blockchain-based decentralized, third-generation version of the internet will eventually replace the Silicon Valley-centric web 2.0 that’s dominated by the likes of Facebook’s Meta, Google
GOOG
, Microsoft and Amazon
AMZN
.
This month, Musk said he plans to turn Twitter into a so-called “everything app” similar to WeChat, a wildly popular app in China that combines messaging, payment and social media elements.
“Buying Twitter is an accelerant to creating X,” Musk said following his reinstated deal to take Twitter private. X.com was the name of Musk’s early 2000s payments company that eventually became PayPal.
