PayPal just froze ProtonMail’s account and questioned the legality of the encrypted email provider, bringing the Swiss business to a screeching halt.
In a statement, PayPal defended its actions under the claim of “recently made changes to the way [PayPal] handled accounts of people who were using crowdfunding sites to support their ideas.”
Translation: PayPal doesn’t like what ProtonMail is doing, so PayPal is simply going to shut down ProtonMail’s fundraiser.
ProtonMail, a company started by Harvard and MIT students (RELATED: Students From Harvard and MIT Launch ‘NSA-Proof’ Email), is dedicated to providing secure email servers to their customers. Because ProtonMail is still a startup and struggling to provide enough accounts to meet demand, they are trying to raise money by accepting donations via their PayPal account. Now ProtonMail’s account is locked down, and their $270,000 in donated funds is frozen and inaccessible.
On ProtonMail’s website, co-founder Andy Yen said the company was not expecting PayPal to freeze their account, even though they knew it had happened to other companies in the past.
“Like many others, we have all heard the PayPal horror stories, but didn’t actually think it would happen to us on our campaign since PayPal promised, very recently, to improve their policies,” Yen said. “Unfortunately, it seems those were hollow promises as ProtonMail is now the latest in a long string of crowdfunding campaigns to be hit with account freezes.”
Yen began poking around for the real reason why PayPal is freezing ProtonMail’s account: PayPal thinks encrypted email is illegal because the federal government can’t access it.
“While the $275,000 ProtonMail has raised in the past 2 weeks is a large amount, it pales in comparison to many other crowdfunding campaigns that have raised sums in excess of $1,000,000 so we can’t help but wonder why ProtonMail was singled out,” Yen said. “When we pressed the PayPal representative on the phone for further details, he questioned whether ProtonMail is legal and if we have government approval to encrypt emails. We are not sure which government PayPal is referring to, but even the 4th Amendment of the US constitution guarantees: ‘The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.’ It seems PayPal is trying to come up with ANY excuse they can to prevent us from receiving funds.”