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PayPal locks out ProtonMail, asks if encrypted email service has government approval

Jul 01, 20143 mins
Data and Information SecurityMicrosoft

PayPal locked down ProtonMail’s account allegedly because PayPal isn’t sure if the Swiss-based NSA-proof email service ‘is legal’ and if ProtonMail has ‘government approval to encrypt emails.’

We previously looked at the huge demand for ProtonMail, an easy-to-use and free NSA-proof email service created by CERN and MIT scientists. It is based in Switzerland, meaning the U.S. government can’t just hoover it up without an enforceable Swiss court order, which is hard to come by since the Swiss legal system has “strong privacy protections.” The demand for the end-to-end encrypted email service was so high that ProtonMail ran out of a month’s worth of server capacity in three days.

On June 17, ProtonMail started an Indiegogo campaign to raise funds for more servers and hosting. The goal was $100,000; the amount raised so far is $290,561 and there’s still 17 days to go. But as of this morning, ProtonMail has become the latest victim of PayPal.

Sure, the folks behind ProtonMail said, they had heard the “PayPal horror stories;” it’s been happening for years, no matter the cause. I remember when PayPal shut down Hackers for Charity. After massive bad press, the PayPal Executive office stepped in, apologized, and helped unlock the funds. Since then, there have been plenty of good crowdfunded causes that have ended up with PayPal locking their accounts. PayPal promised to improve their policies, but those were “hollow promises” as, without warning, PayPal froze ProtonMail’s account.

ProtonMail systems admin Andy Yen wrote:

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. 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….”

Oh hell no! Happy flipping early Independence Day to the “land of free” and Americans who might be seeking to help fund an encrypted email service not based on U.S. soil.

It could be a matter of stupid PayPal policies, or it could be that the person speaking on behalf of PayPal was completely clueless. If the government is actually leaning on PayPal because ProtonMail will be out of its data-hoarding reach, then there is a chance that credit card payments could be next. At least, that was the case for WikiLeaks.

ProtonMail has promised to ignore law enforcement requests, but if the Swiss legal system sees legitimate reason, then an order could be served to hand over a single user’s data. That doesn’t make the service illegal, it just makes warrantless collection “impossible.”

Many people had asked for PayPal to be an option, which is why ProtonMail said it used the service at all. People can still contribute via Bitcoin or via credit card directly on Indiegogo and bypass PayPal completely.

ms smith

Ms. Smith (not her real name) is a freelance writer and programmer with a special and somewhat personal interest in IT privacy and security issues. She focuses on the unique challenges of maintaining privacy and security, both for individuals and enterprises. She has worked as a journalist and has also penned many technical papers and guides covering various technologies. Smith is herself a self-described privacy and security freak.