PayPal backs down on misinformation fine.
(nitter.it)
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I guess you missed this and the other instances like it: https://archive.ph/q0lfu
I wonder how this works with the "porn is a Jewish conspiracy" trash.
But yes, they can stop you having a card. They can't take possession of your money, because only the issuing bank has that authority.
They don't need to take possession of your money, they can just suspend your account or charge you a fee or something.