Notch, the creator of Minecraft, uses a Paypal account for his checkout system. He had accumulated 600,000 euros just last week from selling the game (for reference, this comes out to a little over $763,000.00 in US dollars).
According to Notch's blog, Paypal has informed him that they've noticed a "suspicious withdrawal or deposit" and they're holding the money while they investigate. His blog entry also states that they've given him some vague descriptions of documents they need and that the process could take weeks. Worst of all, at the end of their "investigation", if they decide some funny business was going on, they will KEEP ALL OF IT. Even if they don't keep it, I've heard speculation that Paypal sometimes holds money just to gain interest off of it, not necessarily because they're investigating anything. Hard to prove, but definitely plausible and fiendishly crooked if you ask me.
You may be wondering about the legality of such a move, but from what I've been hearing, this has happened to several other people (see sources below). Notch was going to use this money to start up his own game company, and that's now in jeopardy. This is a real bummer, because Notch is clearly a talented, creative designer who has listened to his fans and adapted his game to meet their expectations from the game's inception. He also seems like an extremely nice guy. : /
I'd recommend anyone reading this who cares about Notch or Minecraft to drop by his blog and let him know you support him. If Paypal decides to keep the money, we should use the power of the interwebs to let them know what we think of this.
The Word of Notch - Crying Over Paypal
SF Bay Guardian - Paypal holds tens of thousands of dollars from Burning Man festival organizers
Website dedicated to exposing Paypal - this is the "horror stories" section of the forum
You can also just do a google search on "Paypal steals" or "Paypal keeps money" and you'll notice several listings covering just that.
Paypal Holding 600,000 Euros from Notch - and they might keep it!
Holy shit, that is ridiculous. I've used paypal for a few years without any problems, but I've heard my fair share of horror stories. I'm commenting on his blog now. Hopefully all this gets worked out and he doesn't lost that money. I didn't even know you could have that much in Paypal at one time, geeze.
More than likely at least one person paid using a stolen CC and they are investigating the matter. They are registered with the FSA in the UK and I would guess the EU equivalent so there are processes to go though regards fraud and money laundering checks.
As you might imagine, a lot of these stories are somewhat sensationalist. Sure, they're holding the money but they certainly won't 'keep it', they're just doing what they need to to protect their business and provide the service people expect of them.
The following quote from a Reddit user on the same story describes the situation quite well:
I'm going through the same thing with paypal right now. It came from the sale of a website, and the subsequent deposit of a large quantity of money into my paypal account, along with several large withdrawls.
They cite FDIC invovlement as the reason for the limited account access, and state that the funds do indeed belong to the owner of the account, but they need to be certain that I am, in fact, the individual who opened it.
Basically they want proof of address, proof of ssn, proof of a bank account attached to your paypal account, and two valid forms of ID. One bank statement is all I needed for three of the above, and the two forms of ID is something frequently required for any banking activities.
While it does suck that he has to deal with this (it is, indeed, a headache) it's not the end of the world. It's SOP for paypal, and I am glad that they go to lengths to be sure of the identify of those withdrawing large sums of money.
€600,000 tuning up in some dudes PayPal account is pretty suspicious. And while it's purely innocent in this case, I expect PayPal to investigate stuff like that. There could be any number of illegal activities leading to huge numbers of deposits like that, and I'm sure there are plenty of cases where people use PayPal for ilegal activities so they have got to show due diligence or they could find themselves in trouble with the authorities for aiding illegal activities. They'll find his activities purely innocent and free up his money soon enough. All the "paypal steals" articles are sensationalist bullcrap. They're like fox news, but 100 times worse.
" €600,000 tuning up in some dudes PayPal account is pretty suspicious. And while it's purely innocent in this case, I expect PayPal to investigate stuff like that. There could be any number of illegal activities leading to huge numbers of deposits like that, and I'm sure there are plenty of cases where people use PayPal for ilegal activities so they have got to show due diligence. They'll find his activities purely innocent and free up his money soon enough. "But it wasn't a sudden deposit of all that money at once. He says in his blog post that they limited it on the 25th and that's when he started pulling in the money which amounts to what is now frozen. It would make sense if he suddenly received $700,000, but he didn't (at least from what I take from the post).
I'm sure that Paypal will work things out correctly, but still, he does mention that he's called three times and gotten unclear responses although I'm also sure that he's more than flustered.
" As you might imagine, a lot of these stories are somewhat sensationalist. Sure, they're holding the money but they certainly won't 'keep it', they're just doing what they need to to protect their business and provide the service people expect of them.I would agree that some of the stories are sensationalized. But I did read a few stories about people losing much smaller amount of money to Paypal (small compared to 600,000 euros small, not one or two dollars small). When one guy tried to appeal the decision, they sent him back what appeared to be a stock one or two sentence response that basically said they had decided against his favor and that he could not appeal!
I love how everyone is up in arms about this, so I am going to play Devil's Advocate. Give them a few weeks to sort it out. That is a LOT of money, what if there actually WAS some 'funny business' going on? What if an identity thief decided he loved Minecraft and maxed multiple credit cards to give Notch money? We don't know the full story, so until Paypal is actually done investigating, the rational thing would be to wait it out.
Ah who am I kidding. This is the internet, no one is rational!
Let's be fair to paypall, it is sort of suspicious to recieve that kind of money. If he was selling child pornography we would've all scolded paypall for not taking action sooner. I also don't understand why someone would let that kind of money accumulate on paypall, he should've transferred the bulk of it to a normal bank.
If it ever happens that Paypal just outright "takes the money", especially for a sum as large as that, I'll shut down my paypal account...but to this day I haven't heard of anyones legitimate money just being confiscated by paypal like that and I have a good feeling that onces paypal has run through it's usual checks and balances that this money will be released in the full amount.
I would certainly agree with PayPal acting somewhat justified here. Yet i have to ask don't they normally have the payment details as using those they could have quite easily "investigated" what was gong on there.
Also this seems like a rather obvious dick move :
Also: Hello Giant Bomb, nice to meet you :3
You might have had a point if
" I love how everyone is up in arms about this, so I am going to play Devil's Advocate. Give them a few weeks to sort it out. That is a LOT of money, what if there actually WAS some 'funny business' going on? What if an identity thief decided he loved Minecraft and maxed multiple credit cards to give Notch money? We don't know the full story, so until Paypal is actually done investigating, the rational thing would be to wait it out.
Ah who am I kidding. This is the internet, no one is rational! "
1. This hasn't happened a billion times on the past to tons of people
2. paypal wasn't now holding his money hostage demanding a 5% fee for no reason that was never announced or asked for
3. his money - which is now his way to fund himself, by the way - wasn't locked away from him pointlessly
Edit: I thought I saw 4 hours ago, not 4 days. I guess it's understandable if you didn't know about the 5% fee they're demanding. I stand by number 1 and 3 though.
Guys calm down, it's the internet and Paypal is essentially an internet bank, they have to be careful with this stuff. The 600k has "built up" since the account was limited, it wasn't just one big chunk of money sent to him.
But still, I'd be rather happy Paypal were asking me to prove I owned the account. You'd be saying the same if you've ever been hacked/robbed.
EDIT: Sounds like they're resolved and taking 5% of his cash from now on. This is where he should stop using Paypal.
My paypal's just been limited and it is the most frustrating thing ever. I've only got a few hundred in there, not thousands, but it's still my money.
I get that paypal need to check this stuff out, but they take so long doing it. I've been waiting a few weeks now, rang them three times and they've just screwed me over.
I hate paypal and feel damn sorry for the guy.
The 5-20% reserve is placed on high volume accounts. It's just money held for 2 months or so to cover refunds and stuff. He will get it all eventually. Still a pain in the ass
"Sounds like they're resolved and taking 5% of his cash from now on. . "
From a personal consumer level Paypal has been great to me, but I have read more than a few reports of businesses having problems. Here's hoping the man can get his money, and the issues is resolved fairly. Never played Minecraft, but it looks like an interesting game with a solid community.
I've used PayPal for most of it's life, going back to before Ebay bought them, and used it for buying, selling, recurring charges, set up a cottage industry and took orders through it. I've probably sent hundreds of thousands of Dollars through it over that time, all with zero problems.
I've heard horror stories about terrorists using it as an offshore account, buyers using it to bilk goods for free by declaring the seller a fraud, and dudeds using it as a secret account to keep money away from their significant other. While that's all true, it's no different than any other offshore account one might use for the same reasons. It's just a "ghetto" version of one that small-timers can use with zero paperwork.
This guy should have set up a legitimate deal with an online shopping cart system if he was serious about going into business. Paypal might be the easy option for a fast way to set up a method to get paid for a service, but if you're dealing with anything that's going to generate more than a few thousand Dollars over a short period of time then you run the risk of the PayPal Police hitting you with the inspection tag.
Of course the news story will never run when it blows over and he gets paid after the initial inspection turns up nothing. It's PayPal actually doing their job and making sure a sudden large influx of funds to an account that normally was doing a tiny fraction of that before is doing so legitimately.
PayPal is required to follow the same regulations that banks and other financial institutions do regarding possible laundering and terrorist funding activities, They are not a Bank, but they are a holding company that is regulated by the same bodies, and subject to the same laws.
Basically the guy using a personal account he probably used for everyday shit as his business account is what got him this, so it's actually his fault.
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