PayPal unfroze the account of Swiss secure email upstart ProtonMail late this morning, freeing at least $300,000 the service raised, that for a day, had seemingly been left in limbo.
A blog post by ProtonMail CEO Andy Yen Monday claimed that his company’s account had been “restricted pending further review.” PayPal went on to lift those restrictions Tuesday around 5 p.m. CEST, Zurich-time, or shortly before noon, EST.
The company raised the funds in just over two weeks and while it acknowledged the sum was a large amount of money, it pointed out that other companies have crowdsourced higher sums in the past; some who have drummed upwards to $1M, via the e-commerce platform.
Yen adds that PayPal made no attempt to contact ProtonMail before locking the account and instead gave the group a phone call and sent it an email to inform the service it’d been locked out. When prodded, a spokesman for the company apparently questioned whether or not the service was “legal” and whether it had “government approval” to encrypt emails.
When reached Tuesday a PayPal spokesman attributed the issue with ProtonMail’s account to a technical problem that resulted in restrictions being put on it.
“We have contacted ProtonMail today to solve this and can confirm that ProtonMail is able to receive or send funds through PayPal again,” the spokesman said, “We are sorry for the inconvenience.”
The startup surpassed $300,000 this week on IndieGoGo, a crowdfunding website similar to Kickstarter, funds that appeared to be unreachable until the account was unlocked today.
While the PayPal issue has seemingly been resolved, ProtonMail is still encouraging would-be users – like it did when their account was frozen – to donate via credit card or Bitcoin.
ProtonMail is the Swiss-based secure mail program that’s being developed by both the European Organization for Nuclear Research (CERN) and MIT scientists.
The service, announced in May, is set to encrypt messages in the browser before they even reach the mail server.
The company chose to base itself in Switzerland partly because a clause of the Swiss Federal Act on the Surveillance of Postal and Telecommunications Traffic (SPTT) that states companies don’t have to “expose their system to any government authority.”
The company has a lofty series of investment goals including encrypted custom domains ($300,000) encrypted mobile apps ($500,000), encrypted chat ($700,000) and encrypted file storage ($1M).
ProtonMail isn’t the first startup service to have PayPal pull the plug on them.
In 2011 the company put a hold on funds that were being raised for Diaspora, a decentralized social network. In 2013 it temporarily halted funds being raised by PreRace, a site that allowed cyclists and runners to register for races, citing fraud suspicions. In 2013 it froze the accounts belonging to investors for Mailpile, another email client that was promising user-friendly encryption and privacy features. In most of these situations PayPal eventually succumbed to public pressure and unlocked the accounts.
In the wake of these snafus, the service announced last September that it would overhaul its policies and work harder to verify each campaign. The new process involves PayPal engaging with crowdfunding campaign owners to understand their goals and to “ensure their campaigns are compliant with policies and government regulations.” This week’s speedbump with ProtonMail suggests that there still may be a rocky path ahead for both the service and burgeoning startups however.
It’s largely thought that secure email services that promise end-to-end encryption like ProtonMail will gain momentum going forward, especially in the post-Snowden, post-NSA surveillance, tech landscape.
Ladar Levison, the founder of now-defunct Lavabit, announced plans last fall to create his own secure email service with help from crypto luminaries Phil Zimmerman, Mike Janke and Jon Callas, of Silent Circle. Dubbed Dark Mail Alliance, the new protocol promises end-to-end encrypted Email 3.0. A beta version is slated for release in the next few months.
