PayPal Freezes Accounts of NSA-Proof Service ProtonMail

July 1st, 2014, 12:21 GMT · By Gabriela Vatu

Again NSA is in your face, probably scared Paypal. Folks I know Paypal is convenient to pay bills, but there are other alternatives, maybe boycott Paypal for a while, who knows maybe they will stand up for consumers rights.

PayPal has decided to restrict payments to and from ProtonMail, a secure email service based in Switzerland.

ProtonMail offers users end-to-end encryption, making the service one of the many anti-snooping solutions available out there, whose popularity has grown exponentially in the past year following the NSA revelations. The service was put together by a group of MIT, CERN and Harvard researchers, which should give it some extra credibility.

ProtonMail offers users protection based on Swizz privacy laws, and the company has no access to user data since it is end-to-end encrypted. The service also doesn’t track users, moving to accept either cash or Bitcoin for paid accounts to ensure anonymity.

The company’s payments were frozen until “further review” without any type of notice. PayPal has limited its statement to saying that it is questioning the legality of the service.

“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. Unfortunately, it seems those were hollow promises as ProtonMail is now the latest in a long string of crowd funding campaigns to be hit with account freezes,” the Swiss company wrote about the many issues it was facing.

ProtonMail says that it has managed to raise $275,000 (€201,000) in the past two weeks, which is a hefty amount. However, it admits that it pales in comparison with other crowd funding campaigns that raised north of $1 million and had their accounts blocked.

Most alarmingly, however, is the fact that the company states that upon asking PayPal what was happening, the payment processor questioned the legality of ProtonMail and inquired about having 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 Swiss company states drily before quoting the American Constitution.

ProtonMail has disabled PayPal as a payment option on its campaign page, while there’s still the option to contribute with credit card and Bitcoin.

This isn’t the first time, and likely won’t be the last time, when PayPal takes it upon itself to block funding efforts to various services upon questioning their legality. The company is, of course, within its rights to try to fend off fraud attempts, but it has frequently misfired.

The fact that it asked ProtonMail if it had obtained government permission to encrypt emails is absurd and unheard of. There is no service out there offering such tools to ask permission for such a thing simply because the notion is ludicrous.

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