Folau had raised almost $NZ700,000 after issuing a plea for financial support for his legal battle with Rugby Australia (RA) after his contract was terminated for posting anti-gay messages to social media.
But the popular crowd-funding website has shut Folau's page down, saying it violates its terms of service. All donors will be fully refunded.
"We are absolutely committed to the fight for equality for LGBTIQ+ people and fostering an environment of inclusivity," the company said in a statement.
There's been a wave of public backlash to Folau's plea, with a petition to GoFundMe to have it taken down garnering over 17,000 signatures in just a day.
Some of his former teammates labelled it "sickening", taking into account Folau's multi-million dollar property portfolio and other perceived worthier causes on the website, which is often the domain for struggling families to fundraise for medical costs.
The cross-code superstar has demanded some of the highest contact rates in both rugby league and rugby, firstly with the NRL's Melbourne Storm and Brisbane Broncos, then Super Rugby's Waratahs.
He also spent two seasons in the AFL with expansion side Greater Western Sydney, but left halfway through a four-year deal estimated to have been worth up to $6m.
"You're paying money to a guy that's made a million bucks a year for probably the last 10-12 years. He doesn't need anyone's money," former Waratahs teammate Stephen Hoiles told Fox Sports.
"When you see, in comparison, the little kids on the exact same page that are fighting for their life, I'm sickened by it."
Former Wallabies backline cohort Drew Mitchell endorsed Hoile's perspective and slammed Folau's approach.
"He's well off," Mitchell said on Fox Sports. "Let's be honest, he's got plenty of assets and things like that, and if he really believed in what he was doing, he could sell off and go fund it himself."
Rugby Australia chief executive Raelene Castle also condemned Folau's public appeal.
"From our perspective, [GoFundMe] is a place where sick children get support, so it's certainly not a strategy we think is appropriate," Castle said.
Also under fire was a clause lost in the small-print of the GoFundMe page that said the donations were a "gift" and Folau was under no obligation to "apply the funds in any particular way with respect to his legal action".
In an Instagram post on Saturday evening, Folau paid tribute to those who had kindly sent money towards his fund.
"Thank you to all those who have given to my Legal Action Fund so far," Folau wrote to his 363,000 Instagram followers. "I am humbled and overwhelmed by the support I have received, for which I am very grateful.
"I have received thousands of messages from supporters who believe discrimination in the workplace is wrong and has no place in Australia or anywhere else.
"For those not in the position to donate, I value your prayers and messages of support so much. God bless."
Folau's wife - Silver Ferns great Maria Folau - also received criticism for promoting her husband's campaign on social media. She was later cleared of any wrong-doing by both the Adelaide Thunderbirds - who she plays for in Australia's Super Netball - and Netball Australia.
The 30-year-old was issued a high-level breach of RA's professional players' code of conduct for his homophobic posts on social media that resulted in the early termination of his $4m contract.
He believes that termination was unlawful and a violation of religious freedom of speech, vowing to fight both RA and Rugby NSW in the high court.