Whether it’s paypal, stripe or whomever else, it’s completely absurd that they can just hold your money hostage for indefinite period of time for no reason.
The amount of fraud that happens in electronic payments is absolutely staggering. As soon as someone finds out your defenses are lower than someone else, you get spammed with people testing stolen credit card numbers.
Your account can, and will, be blacklisted promptly. If your payment processor and the banks they work with don’t stop you, the credit card company will.
This kind of thing happened at every place I’ve been at where financial institutions are involved.
The size of your company does not matter. Visa has so many customers they do not need Amazon. If Amazon fucks up, they will pull the plug if something isn’t fixed.
That said the fastest way to a resolution is often exactly this. Either get a lawyer to send a letter saying you're gonna file in court, or just file for arbitration yourself.
If money on that scale is at stake, this is a comparatively cheap way to make sure a real human looks at the problem.