PayPal freezes ProtonMail's account due to legal concerns | Hacker News Reader

PayPal freezes ProtonMail's account due to legal concerns

dailydot.com

38 pointsblottsie22 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.

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...

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

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

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...

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

No, no I surely know they do freeze for valid reasons. You are right, we usually dont hear about those instances.

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.

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.

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.

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?

Admittedly, my comment was made in haste. But I was fortunate enough to turn up something at least tangentially related:

http://en.wikipedia.org/wiki/Expedited_Funds_Availability_Ac...

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?

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?

While I am firmly in the "ProtonMail is snake oil" camp, this is obviously a stupid move on PayPal's part (why are people even still using them?). Even if the old idiotic export control laws were in place (they are not, and Paypal should know that, since it uses TLS and doesn't check the physical location of the counterparties before negotiating an encrypted session with them), it's not even clear to me that ProtonMail would be subject to them, since they are based in Switzerland (assuming their technology was developed in Switzerland). Are they even US citizens?

See also Paypal blocking anything vaguely connected to Cuba.

I live in England. Let's say I want to go to see something about the Buena Vista Social Club, and that it is held in London. (London, England).

I am not allowed to use PayPal to pay, because Cuba.

People have tried and failed to buy dresses that are called "cuba".

That actually makes sense. Paypal is subject to U.S. embargoes of Cuba, Iran, Syria, etc. Yeah, it's kind of stupid to just do a pattern match, but until we invent A.I. strong enough to figure out when "Buena Vista Social Club" means London and not Havana, it's probably smarter to dedicate scarce resources to handling exceptions to the pattern match.

> While I am firmly in the "ProtonMail is snake oil" camp

Could you point to some analysis of that? I can see many people shouting "javascript crypto!" which I agree seems to be the only way they can do what they claim in a cross-platform manner, but I see no such detail of what they are doing (or planning to do) in that regard. All the funding advert page stats if "end to end" not "end to end using technology X".

> why are people even still using [PayPal]?

Momentum due to critical user mass, and lack of alternatives in many places, most likely. Other payment processors are not as available globally, charge more, or are even less trusted then PayPal. Bitcoin is too unstable for my tastes, and not something I see Joe Public using en-mass in the near future.

Using Bitcoin for this would make sense though: I would guess that most (if not all) those paying in are users of the currency already or would be willing and technically informed enough to join in for just this purpose.

> Are they even US citizens?

While that probably should be relevant, I doubt it is something that PayPal really consider. They have concerns in the US and are not going to risk having them frozen by going up against US law over this any more than I am going to sue PayPal over a few tens of $ - it would cost too much in time, legal fees, and so forth. Where something might contravene US law in any way they'll block now and ask questions later mainly because they don't want those enforcing US law to do similar (slap PayPal now, ask questions later).

Does this look like it has the backing of the law to you? It looks a lot like when Amazon received a phone call to shut down Wikileaks. I imagine the same happened here - just a phone call to the right people inside Paypal.

If the actual law was being involved, we'd see some kind of legal notice at the very least. And even then it would be a BS request that could easily be challenged.

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

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)

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.

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