So many HN commenters have this gut hatred of PayPal, which honestly isn't warranted. You'd find trouble finding ANYTHING that can accept $300k in donations for an unreleased product without some kind of review. This is the case over and over again in these "PayPal froze my account" horror-stories/whines, and somehow people have trouble learning to just contact the company FIRST and let them do the investigation before funding begins, instead of while in progress.
I defy you to find a single other financial partner who'd let this kind of behavior slide without review. (And Bitcoin doesn't count ... not if you want to accept donations from any reasonably large number of people.)
People (not just HN commenters) hate paypal because of a bad reputation that it earned over a long period of time for having horrible customer service, making opaque, terrible decisions that affect people financially, having a terrible UI, and maintaining a monopoly position for largely legislative and legacy reasons. It's fairly common for people to have a personal story about how paypal screwed them, rather than hearsay.
Honestly, I think they've improved vastly on most of this since, but their bad reputation is entirely deserved.
I have a strong dislike of Paypal, but it's warranted. Not over things like this (I had my own donation account locked once, and a quick email exchange got it unlocked with no problems).
I used paypal because I thought it provided me some protection.
I purchased web hosting using my paypal account. Then one day, the company doing the hosting folded up and disappeared. Since I had just prepaid a month of service, I filed a claim with paypal for services not received.
12 hours later, they had completed their research and determined that they would not proceed to charge this back against the merchant. No further details provided to me, and case was closed.
It seems to me that if a company is advertising itself as protecting its customers (which are both merchants and purchasers), then it should do so. In my particular case, I provided ample documentation to show that a) I had paid the charge and b) the company I paid closed up shop and had no intention of providing the service I paid for. Yet without explanation or transparency, they were able to shut my case down. I later learned I"m far from alone in this experience.
So perhaps the dislike of paypal for the reason in the article isn't warranted - but they have a long history of problems completely unrelated. That's what happens when you want to have all the profits associated with being a credit card processor, and yet be constrained by none of the regulations.
It's pretty safe to assume "which government" is the government in which the PayPal account was opened. This is an employee of a financial business trying to determine if an organization they're underwriting is doing anything illegal in their jurisdiction, as that would be a prohibited use of the service. He/she is a normal human being, who isn't an expert in every possible line of business, trying to suss out the information he/she needs to approve this account -- put yourself in their shoes for a moment.
I do not think so. I am not sure if you are aware of Hawala http://en.wikipedia.org/wiki/Hawala or so many other malicious instruments that can be used in a manner similar to crowdfunding. This also includes other factors when looking at international donations to a project which usually come under numerous regulations that need to be answered by PayPal. To not investigate such transactions would be a blunder and the freeze has not been very long. I see no need for an apology for a routine check when it has been clearly stated in their terms and conditions.
If I was paypal, and decided to reverse the freeze, I would immediately unfreeze it, and then take the time to write something up.
From a PR perspective, I would think it would be better to say "We wanted to unfreeze immediately so they could start take donations again." rather than "We kept it frozen until we had time to write an apology."
Not saying we're definitely going to get one, but I could see why it might not come immediately.
I imagine Paypal freezes quite a few accounts every day. I respect them more for treating it as business as usual, and not necessarily caving to internet pressure. They are a company dealing with financial transactions, and them screwing up is not just a matter of someone not getting funding, it can be a matter of many people being the victims of fraud. As long as they have reasons for their actions, and they are in line with their published policies, and they attempt to rectify problems quickly when they occur (apparently within a single day in this case), I see no reason they should be putting out a PR response to everyone who cries foul.
