PayPal Freezes $275,000 Campaign Funds of ProtonMail Secure-Email Startup
ProtonMail, an End-to-End Encrypted email service developed by MIT, Harvard and CERN researchers, who already received over $275,000 from a crowdfunding campaigns to their PayPal account, and was so much excited to launch its beta version, but just before that PayPal freezes their account without any warning.

"At this time, it is not possible for ProtonMail to receive or send funds through PayPal," ProtonMail co-founder Andy Yen announced this morning. "No attempt was made by PayPal to contact us before freezing our account, and no notice was given."

ProtonMail is a new super-secure email service that encrypts the data on the browser before it communicates with the server, this means only encrypted data is stored in the email service servers.

ProtonMail service is based in Switzerland, so it won't have to comply with American courts' demands to provide users data. But a representative from the American payment service, PayPal told the company that the payment service is not at all sure if ProtonMail is legal or not and asked them for the necessary government approvals to encrypt emails.
"He [Paypal representative] 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…." ProtonMail said in a blog post.
No doubt, it is completely legal to encrypt emails and as far I know, no such government approval is required.

PayPal Freezes $275,000 Campaign Funds of ProtonMail Secure-Email Startup
Few months back Paypal updated its policies for Crowdfunded Projects [page Deleted by Paypal], that use Paypal as a payment option on crowdfunding platforms like Indiegogo and Kickstarter.

According to new policies, Paypal may ask fundraisers to provide supporting documentation to confirm their identity and/or business or to confirm how the money from the campaign will be used. Individuals or organizations have to submit following information to Paypal:
  • Full legal name and Date of Birth
  • Address and Government issued photo identification
  • Tax Identification number or Social Security number
  • Website address associated with your campaign
  • Proof of tax exempt status if you're a nonprofit
  • Your business plan and mission statement
  • Names of your business owners and executives
  • Marketing strategy and Vendor, supplier, manufacturer, or distributor information
PayPal doesn't want to deal with upset customers in case a campaign turns out to be a scam or if it fails to develop a final product, because many crowdfunding websites allow owners to pull funds before they reach their final goal.

ProtonMail was supposed to be an easy end-to-end email encryption tool that will hopefully give an end to Internet surveillance around the world.
PayPal Freezes $275,000 Campaign Funds of ProtonMail Secure-Email Startup
ProtonMail will implement AES, RSA and OpenPGP encryptions and moreover, there is even a "self-destruct" feature in the email service which ensures your emails are only available for a limited period of time.

ProtonMail is still crowdfunding, but it's only taking credit card and Bitcoin payments and it has gained over US$10,000 in Bitcoin donations alone.

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