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PayPal blocked Flipper Zero account with $1.3M

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Re: PayPal blocked Flipper Zero account with $1.3M

#31
post #22
post #15

Earlier quoted context omitted.

Or could it be because of their product? https://flipperzero.one I’d not be shocked if their product danced somewhere on the line of legality. In a similar way that as it’s illegal to own lock pick set in some states, which can be also considered a personal pentesting hardware.

Unlikely. The tweet thread says they asked for compliance information related to the business (address etc), which to me indicates it was sanctions-related. I don't understand how they left $1.3m sitting in a single account however. Surely they're not paying for bulk h/w component orders through PP.

It's not as cut-and-dry as it seems. Noone leaves 1.3M in an account. When your account starts generating income, they place a 'light hold' on the account - requesting 'reasonable' information.

During this time, you can still receive funds, and you're promised quick resolution. You provide the documentation. They drag their feet. They request more information. They drag their feet. All the while, your account has accumulated more funds that you can't access.

Then, they'll request something impossible, ie: give us proof of delivery (not shipment) of these 500 orders. Inevitably, there'll be one order that was returned / was delivered without signature / etc.

You'll try to reship the customer, but you've got a 3 day deadline. You miss the deadline, and the account gets perma-frozen for 180 days, but you still believe you'll get your funds back.

180 days later, you'll be notified that your funds aren't eligible for return, because you cost them the equivalent of what was in your account due to the time invested by their legal and risk teams - because buried in their T&C they evoke Common Law allowing for punitive damages for T&C transgressions.

It's calculated extortion to seize as much money as possible.

Re: PayPal blocked Flipper Zero account with $1.3M

#33

Earlier quoted context omitted.

He was not a Russian citizen living in Russia during that time. So there is a huge difference.

So what's your point then? Everything made by a Russian is bad or what? :)

It's a US sanction. Yes, it would be bad for the employee who makes the decision that this account isn't within the sanction's scope. If US government disagrees, the employee will likely go to jail.

It's expected for companies to overdo the sanction considering that under-doing could get employees a long jail time.

Plus, Paypal employees get paid the same whether or not Flipper Zero is within the sanction's scope.

Re: PayPal blocked Flipper Zero account with $1.3M

#34

Earlier quoted context omitted.

I would say what the main issue here is what PayPal allowed them to establish a business account (June 7th) and happily took money from their customers. Now both the company AND it's customers are fuc^W scammed out of their money. Seems like Stripe doesn't have a problem with them (because they are incorporated in Delaware, not in Russia?)

They have been US company long before the war. You are just saying they are affiliated with Russia just because they have many Russian employees? That's right?

No, because they have an office in Moscow and the money ends up going to Russia.

Re: PayPal blocked Flipper Zero account with $1.3M

#37
post #30

PayPal performed a "freeze and seize" on our account ~12 months ago, netting just over 50k EUR. They then went on a war of attrition, enumerating across distinct companies, shareholders seizing funds across all accounts (including accounts of unrelated companies and personal accounts in Hong Kong and Australia) No information was given. After the 180 days "freeze" period, they announced that the funds would not be re…

You spent well over 100k and recovered 50k.

If you were also compensated for your legal expenses in the process, then sure "don't be intimidated" is a calculated risk.

If you didn't, then it seems like you are a loser either way and should just encourage customers not to pay with PayPal. Sharing the story with your customers and other developers does more damage to PayPal than fighting.

Re: PayPal blocked Flipper Zero account with $1.3M

#38

Anti money laundering laws forbid banks and facilitators from disclosing the true reason for freezing the account. If PayPal told them they'd literally be breaking federal law. So a money laundering flag seems most plausible given the silence.

So what's the resolution in that situation? Does Flipper Zero just throw their hands up and lose the money?

Re: PayPal blocked Flipper Zero account with $1.3M

#39
post #30

PayPal performed a "freeze and seize" on our account ~12 months ago, netting just over 50k EUR. They then went on a war of attrition, enumerating across distinct companies, shareholders seizing funds across all accounts (including accounts of unrelated companies and personal accounts in Hong Kong and Australia) No information was given. After the 180 days "freeze" period, they announced that the funds would not be re…

Please consider writing a blog post online, so there's a permanent link to your story online somewhere.

You have described a pretty elaborate system designed to dodge accountability when customers ask questions. You should consider talking to a business journalist as well. Here in Canada, the public broadcaster's website has a "Go Public" section where well-documented customer complaints are publicized. In most cases, the company pays up what it owes, but only after the story becomes public.

https://www.cbc.ca/news/gopublic

Re: PayPal blocked Flipper Zero account with $1.3M

#40
post #38

Anti money laundering laws forbid banks and facilitators from disclosing the true reason for freezing the account. If PayPal told them they'd literally be breaking federal law. So a money laundering flag seems most plausible given the silence.

So what's the resolution in that situation? Does Flipper Zero just throw their hands up and lose the money?

They can go public, which is what they've done here and on Twitter.

After that, they have to consider legal action, and it won't be cheap.

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