PayPal freezes ProtonMail's account due to legal concerns

PayPal freezes ProtonMail's account due to legal concerns(dailydot.com)

38 points by blottsie 11 years ago | 22 comments

While I know nothing about the details of this case, the vast majority of these cases seem to be due to mistakes on how the companies set up their PP accounts. PP needs to deal with fraud, and it can be hard to tell the difference between donations for a product to be launched sometime in the far future and a scam. I think the best practice is to get in touch with PP _before_ accepting nearly $300k and make sure they're expecting the money and understand the situation.

Statements like "PayPal, which is ultimately owned by Glenn Greenwald backer Pierre Omidyar ..." which are pretty obviously false (Omidyar owns <10% of the company) make me further skeptical of this article.

DanBC 11 years ago |

This is a lousy article that adds nothing (but unsourced speculation) over the Protonmail page that it links to here: https://protonmail.ch/blog/paypal-freezes-protonmail-campaig...

campuscodi 11 years ago |

Stop using PayPal for fund raising already. Haven't we gone through enough of these stories yet?

knodi 11 years ago |

Why doesn't some company with a frozen account by paypal, sue the shit out paypal???

jason_slack 11 years ago | |

I've often wondered this too. It seems to me that more times than not Paypal freezes an account on a "whim". Almost like they are unsure if they would or wouldn't face legal ramifications later so they just freeze it to be safe. People backlash they unfreeze but at the end of the day they have suffered nothing except people being mad at them...

brazzy 11 years ago | | |

It seems to you like that because you never hear about the many instances where Paypal freezes accounts for actually fraudulent transactions.

dspillett 11 years ago | |

Because they have agreed to the Ts&Cs which allow PayPal to do this under the relevant circumstances?

While they could potentially argue the circumstances are not correctly interpreted or were not legal to dictate and agree to in the first place (and therefore not enforcible), can they afford the time and legal costs to do so especially given how long Paypal (or other large organisation they are in a similar position with) can afford to let things drag on for?

chatmasta 11 years ago | |

Paypal enjoys many of the protections of banks (even FDIC insurance), but skirts many of the regulations. Namely, the regulation that it is illegal to withhold your customers money.

brazzy 11 years ago | | |

Can you point out which regulation actually says that, and how it applies to things that are actually comparable to Paypal, such as a credit card merchant account?

x1798DE 11 years ago | |

I'd love to see that happen, but I imagine if you read the Terms and Conditions they've got some clause in there that allows them to do this. I wonder if there's anything in there about the duration of the freeze, how long they have until they return the money to its original owners, and whether they have to pay any interest on the money when it's frozen.

I don't really know much about this sort of thing, but I'm guessing that Paypal must be insanely low cost compared to their competitors or something, because I can't imagine anyone deliberately choosing Paypal unless it were really cheap to do so.

tomw1808 11 years ago | | |

And what if they have a clause in their ToC that they are allowed to kill you, are they allowed to kill you then? ...

Paypal is convenient and well known, that's all. They are in fact expensive and extremely unrecommended for anything else than personal low-frequency convenient payments imho.

just my 2 cents.

diafygi 11 years ago |

http://www.cryptolaw.org/cls2.htm#us_exp_1101

> On 7 January 2011, a minor amendment was made to the EAR (Federal Register Vol. 76, No. 5, p. 1059). Publicly available mass-market encryption object code software (with symmetric key length exceeding 64 bits), and publicly available encryption object code of which the corresponding source code falls under License Exception TSU (i.e., when the source code is publicly available), are no longer subject to the EAR. The amendment includes some minor specific revisions.

Since ProtonMail is javascript crypto, their encryption source code is available and therefore is allowed, right?

aman_abhishk 11 years ago |

When people ask me why bitcoins are needed in this world, I will cite this as another example. Whether ProtonMail is able to provide what it claims is irrelevant, the fact that a few people decide how I spend My money is as outrageous as it could be. #Wikileaks

Zaephyr 11 years ago |

Sure feels like money has been privatized by EMV & PP. I guess I'm going to have to go figure out Bitcoin and Dogecoin one of these days.

(I realise that the issue is actually money transmitting)

drivingmenuts 11 years ago |

The thing that bothers me is that a company would consider itself the enforcer of The Law. While it is incumbent on any company to obey said Law, it's the government's job to enforce it.

So, rather than shut down an account, since PayPal doesn't necessarily have the details, they should just bundle up what they think is the incriminating evidence, toss it over the wall to the US Attorney and ask "This legal, bro?" If yes, done. If not, then the government can toss it back over the wall and say "Shut it down, dawg."

We might have better-considered laws if the government actually had to deal with half the consequences of passing said laws.