Cyberlocker To Shut Down After PayPal Ban
Found on TorrentFreak on Sunday, 26 February 2012
RapidGator, one of the file-hosting sites that grew exponentially following the Megaupload shutdown last month, has been banned by PayPal. As a result, the Russian-based site says it will close the service in a month. According to PayPal, the RapidGator account was closed due to the “high risks” associated with processing payments to file-sharing services.
PayPal has frozen the cyberlocker’s funds for 6 months and new users can no longer make payments through PayPal. The ban probably means that “affiliates” can’t be paid through PayPal either.
At this point, cyberlockers are completely legal services. PayPal has no legal grounds for banning them. If it's only about "morals" then it would have to ban any stock related business too since stock markets also have high risks. Just ask everybody who lost money there. I guess PayPal just wants to grab their money for half a year; they have a long history of locking big accounts for no reason, something a real bank cannot do. The only good thing about this is that it will only drive users to alternatives which in the end makes it harder for PayPal.