Trump's travel ban sends 'worst message possible' about US, PayPal co-founder says

Levchin: Policy says the land of opportunity is closing its door

Border security is essential, but a new policy from the Trump administration sends the "absolutely worst message possible" about America's stance on the refugee crisis in Syria, said Max Levchin, PayPal co-founder and founder of consumer credit start-up Affirm.

"There's a way to do it right. ... The message that we're sending with this policy is that the land of opportunity is closing its door, to those that either need its help, or want to come here and contribute to our greatness, our growth," Levchin told CNBC's "Squawk on the Street" on Tuesday. "This is just the most blunt tool imaginable."

Allowing people to communicate with their families, change travel plans and other considerations should have been built in to a policy to that currently ban travelers from predominantly Muslim countries said to harbor terrorists, Levchin said.

Max Levchin
Noah Berger | Bloomberg | Getty Images

"I'm at the very least encouraged by the fact that the administration has heard the peaceful protests, all the rhetoric that's come out over the weekend against this policy ... so I certainly will keep my eyes open and look for improvement," Levchin said. "But words don't really do the job — you have to do the work."

The U.S. policy change follows struggles around the world with how to handle the influx of refugees from the Syrian crisis.

Gulf states have provided financial and logistical assistance to migrants seeking refuge from the Syrian conflict — where, according to the Migration Policy Centre, nearly 11 million have fled to other countries since 2011, mostly Turkey and Europe — but have not offered sanctuary to the displaced. According to data from the Migration Policy Institute, some 86,000 Syrian immigrants resided in the United States as of 2014, which then accounted for 0.2 percent of America's 42.4 million immigrants.

With all the people from the tech community that are advising the president, to the national security team, the United States could have come up with a "more nuanced" policy, Levchin said.

"It's not a Silicon Valley issue, it's an impact on the entire nation," Levchin said. "I was a refugee 25, 26 years ago, and I tried as hard as I could to earn my right to be in America. I take great pride in my American passport."

Tweet: My family & I, & 1000s of Soviet Jews like us came to US as refugees in '91 running from regime that persecuted us because of who we were.

Levchin has been outspoken about how the new administration will affect Silicon Valley start-ups. In a memo obtained by CNBC before the inauguration, Levchin urged friends to leverage lobbyists, congressional connections, press and transition team contacts to protect Obama-era rules on entrepreneurship and skilled immigration.

Perhaps Levchin's most famous political contact is fellow PayPal co-founder Peter Thiel, who was part of Donald Trump's transition team. The Trump administration has recently clashed with technology CEOs over proposed policies to limit skilled immigration, build a border wall and the travel ban.

Thiel, well-known for his libertarian views, has said he "doesn't support a religious test, and the administration has not imposed one." But many in tech disagree. At Google, for example, workers around the world held demonstrations on Monday, and held signs reading "ban fascists, not religions."

Levchin told CNBC he could not speak for Thiel.

In a story published by The New Yorker this month, Levchin prodded the technology industry to be more genuine on social issues.

"I typically ask people, 'So you're worried about the pitchforks. How much money have you donated to your local homeless shelter?'" Levchin said to The New Yorker.

— CNBC's Javier David contributed to this report.

Correction: This story has been updated to reflect that the information about the 86,000 Syrian immigrants came from the Migration Policy Institute, and the information about the 11 million Syrian refugees came from the Migration Policy Centre.