Digital payments company PayPal, co-founded by Elon Musk, has taken a U-turn on a controversial policy that sought to fine its users $2,500 for spreading “misinformation” on its platform.

The company claimed the policy update had gone out “in error”, as Musk and former PayPal president David Marcus criticized the policy on social media.

“An acceptable use policy (AUP) notice recently went out in error that included incorrect information. PayPal is not fining people for misinformation and this language was never intended to be inserted in our policy,” the financial services company said in a statement.

“Our teams are working to correct our policy pages. We’re sorry for the confusion this has caused,” a company spokesperson told National Review.

Marcus blasted the company on Twitter late on Saturday.

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“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,” said the crypto entrepreneur.

“A private company now gets to decide to take your money if you say something they disagree with. Insanity,” he added.

Musk replied: “Agreed”.

In 1999, Musk co-founded online bank, which merged with Confinity in the year 2000 to form PayPal.

E-commerce platform eBay acquired PayPal for $1.5 billion in 2002.

The Tesla CEO has now said that buying Twitter is to fulfill his dream to build a super app called like China’s WeChat that will be available to all globally.

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“Twitter is an accelerant to fulfilling the original vision,” he tweeted.

Musk, who has offered to buy Twitter again for $44 billion, has floated the idea of turning Twitter into the next super app.

The super app will serve as a “digital town square” that lets users leave comments and post videos.