Update: Seems there’s some fishiness going on about this whole deal. http://www.reddit.com/r/Bitcoin/comments/1uw282/before_we_get_too_excited_about_the_ebay_merchant/
PayPal is known for being antagonistic towards Bitcoin. The company is known to “sever business relationships” with people who sell Bitcoin products (specifically miners) on eBay, the company that owns PayPal. It doesn’t really seem fair for PayPal to block people from selling Bitcoin mining gear. After all, Bitcoin miners are just specialised computers, and there’s nothing illegal or prohibited in eBay’s terms of service about selling computers. But since Bitcoin threaten’s PayPal’s entire business, it seems a logical (though anti-competitive) move on PayPal’s part.
However, one eBay merchant who goes by the username TerraHasher on Bitcointalk.org has had enough of PayPal’s anti-Bitcoin stance. PayPal has repeatedly frozen his account for selling Bitcoin products on eBay. His plan is to take the online payments company to court.
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“I finally got a judge to allow me to file a lawsuit against PayPal, and after complying with the judges request that we send a letter of intent to sue them this week and giving them 2 weeks to reply or resolve the issues. We will be allowed to file a 4 MILLION dollar lawsuit against paypal…
after going from customer service rep, to supervisor, to specialist, to team lead, then finally to manager over the course of 1 hour 30 minutes with nobody giving me any real information. I HIT GOLD, the manager states, your selling bitcoin. i politely reply, ‘no sir, i am not, that is against paypals rules, i am selling specialized hardware which is like a computer but designed for one purpose, and that is hashing on a SHA- 256 encrypted network.’ He replies back, well it’s all the same and bitcoin is direct competition with paypal’s business model therefore we do not condone, anything bitcoin related.“
The PayPal representative outright stated that they do not like Bitcoin because it competes with PayPal. Terra’s account was repeatedly frozen and unfrozen until he finally decided to get his lawyers involved.
“By wednesday afternoon [January 1] my legal team says O.K. this is where we step in, a company cannot hold peoples money hostage because they dont like bitcoin. And the battle begins, their paralegals transcribe every phone call, copy every e-mail print every screen shot, copy hundreds of complaints from srew-paypal.com and paypal sucks.com. The start blasting it everywhere, writing senators, congress people, filing complaints with the DOJ, the FTC, the IC3, the NW3C everybody pretty much, at the same time the file a petition with the court for a ruling on letting us Sue them in court…
…[the judge] then turns his phone around and it is flashing the number 34 on it, as in 34 voice mails. He says ‘you sure know how to ruin a mans weekend, i dont know who you talked to, but i want to see all of you in my courtroom on monday morning and i will rule on your petition…’
This morning we arrive 30 minutes early at the court house and the room had like 15 people in it. The judge comes in, sits down, and says ‘Send them a letter of intent to sue, request that they reply within 2 weeks, if they do not resolve the issue, or reply, i will see this case in my courtroom.’ “
This story is ongoing and it’ll be interesting to see how it unfolds. Personally, I’m rooting for Terra. PayPal has unjustly punished too many of its users in the past and it’s time for a change.