The move against Mega is disturbing:
PayPal pulls services from Mega over legitimacy concerns
PayPal has ceased processing payments for the Kim Dotcom founded Mega – the file storage and encryption firm looking to join the New Zealand stock market via a reverse listing, amid claims it is not a legitimate cloud storage service.
NetNames, a US group with funding from the Motion Pictures Association of America, was claiming its services were not legitimate or legally compliant which was then used by US senator Patrick Leahy to pressure Visa and Mastercard to stop processing users’ payments for the Auckland-based service, Mega said in a statement. PayPal, the online payment system, was in turn pressured by the credit card companies to cease payments as well.
So Big Hollywood can now shut down banking services for anyone they don’t like? It certainly looks that way. From Mega’s blog:
MEGA provided extensive statistics and other evidence showing that MEGA’s business is legitimate and legally compliant. After discussions that appeared to satisfy PayPal’s queries, MEGA authorised PayPal to share that material with Visa and MasterCard. Eventually PayPal made a non-negotiable decision to immediately terminate services to MEGA. PayPal has apologised for this situation and confirmed that MEGA management are upstanding and acting in good faith. PayPal acknowledged that the business is legitimate, but advised that a key concern was that MEGA has a unique model with its end-to-end encryption which leads to “unknowability of what is on the platform”.
MEGA has demonstrated that it is as compliant with its legal obligations as USA cloud storage services operated by Google, Microsoft, Apple, Dropbox, Box, Spideroak etc, but PayPal has advised that MEGA’s “unique encryption model” presents an insurmountable difficulty.
Commenting on the above, here’s techdirt:
Paypal Cuts Off Mega Because It Actually Keeps Your Files Secret
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That last line is particularly bizarre, given that if anyone recognizes the value of encryption it should be a freaking payments company. And, of course, Paypal can’t know what’s stored on any of those other platforms, so why is it being pressured to cut off Mega?
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And, this all goes back to this dangerous effort by the White House a few years ago to set up these “voluntary agreements” in which payment companies would agree to cut off service to sites that the entertainment industry declared “bad.” There’s no due process. There’s no adjudication. There’s just one industry getting to declare websites it doesn’t like as “bad” and all payment companies refusing to serve it. This seems like a pretty big problem.
This is a very slippery slope indeed. But I guess the politicisation of banking is one way to drive people to Bitcoin.
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