Social network Diaspora has accused PayPal of blocking its account.
In an effort to avoid the data privacy concerns raised by competitors like Facebook, the social network is operated on distributed servers, allowing users to maintain control over their information.
Without giving any justification, Diaspora claimed that PayPal had “arbitrarily” frozen its account.
A post on the Diaspora blog states, “We had raised $45,000 in just a few days, and then PayPal froze our account.” “Even though we’ve complied with every request from PayPal, including giving them our certificate of incorporation, it still won’t explain any of its moves to us,” the company said.
According to the developers, PayPal denied an appeal and locked down those donations for 180 days in an email to Diaspora. Yes, that’s correct, the post continued. While we wait for PayPal to provide an explanation for its decision, it gets to earn interest on all of our donations for the next six months.
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It continued, “PayPal is notorious for arbitrarily blocking legitimate donations. After refusing to accept donations for Wikileaks, PayPal came under fire last year and attracted the unwanted attention of hackers.
The group intends to file a lawsuit. It stated, “Obviously, PayPal’s conduct is unacceptable, which is why we have requested the involvement of our lawyer.”
The good news is that Diaspora is now accepting donations through Stripe, a payment startup. Stripe quickly responded to Diaspora’s request for assistance and jumped into action, enabling it to quickly restore its online donation system. “We installed a brand-new payment service in a matter of hours.”
Update: PayPal admitted to having frozen the funds, but claimed that Diaspora can now access its donations once more.
Due to our privacy policy, we are unable to specifically comment on the Diaspora account, a PayPal representative said. However, we can attest to the fact that the money has been released, and we are coordinating this issue with the account holder directly.
Conclusion
PayPal acknowledged that it occasionally locks accounts for security or legal reasons. In the event that there are numerous complaints, “we may occasionally require a business or charity to hold funds in their accounts to ensure that they can refund their customers,” it continued.
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