PayPal terminates account of Epik, home to Proud Boys domain and Gab | Hacker News Reader

PayPal terminates account of Epik, home to Proud Boys domain and Gab

mashable.com

204 pointsaspenmayer214 comments

From the article:

> According to one letter, penned by Epik’s SVP of strategy and communications, Robert Davis, PayPal inquired about offshore accounts, money transmission licenses, and "other queries related to cross‐border activities and law enforcement."

> “[The questions] were absolutely absurd, and well outside of any knowledge or experience we have as a domain registrar,” said Davis.

These sound to me like things PayPal very obviously should be asking of anyone using them to run a cryptocurrency.

Interesting that they've taken down the masterbucks page now linked in the article and with the archived note about tax advantages, and moved it to masterbucks.com which their FAQ claims they control: https://www.epik.com/support/knowledgebase/using-masterbucks...

Yes, I think many people commenting here have jumped to react to the headline with their own political views, not the article. Perhaps the title should reflect it's over money laundering, not content of Epik's clients.

Anyone who has read stories of or dealt with Paypal before knows they will cut off access if they even have an inkling of illegal activity happening. Their relationship with the banks and payment processors depends on it. So it's no surprise Epik advertising tax evasion using Paypal would get them terminated.

Epik doesn't really help their case with the response letter, it's written in a unhinged fashion without any substantiation of their claims of censorship by "Paypal executives".

That's called selective enforcement

It totally is. They're selectively enforcing their policy against people large enough to catch the attention of PayPal's Compliance Teams.

Automated actions are taken against small accounts, Manual Enforcement will happen against large accounts.

It's kinda shitty if Epik knows they are participating in questionable business practices, can't answer basic questions needed for SEC, and then turn around and try to spit this out as the whole thing being political.

This hurts people who want to run independent alternative platforms in the long term.

>This hurts people who want to run independent alternative platforms in the long term.

This is what I'm most concerned about.

If someone wants to get an independent registrar or other piece of infrastructure set up in the future, they shouldn't be associated with, or have to deal with the stigma of others that have done similar things just to end up conducting illegal activities. It will eventually lead people to believe that anyone who wants to break the mold will eventually do illegal things, so they might as well just not allow that to begin with.

They don’t care. Today’s political climate (in the US) encourages divisiveness, so if anything can be spun as a left vs. right issue, it will. Especially if it’s a far-left or far-right organization.

A solid warning sign of impending social collapse.

That's what you get when you start treating politics as though it is a teamsport instead of a way to run a country, and where parties try to undo as much as possible of their predecessors.

They chose to not participate with PayPal, and invent their own currency, and in exchange, PayPal stopped dealing with them. Their questions were fairly basic KYC form-letter questions anyone selling a financial service should be able to answer - if they couldn't, they might be in trouble with the SEC, not just PayPal.

And yet this entire thing is going to turn into an ugly left vs. right culture war, even though this is probably more about KYC regulations.

Fortunately, https://news.ycombinator.com/item?id=24894248

Fought by a tiny minority, yes, but that tiny minority can stir up enormous amounts of large scale contention and discord.

That "tiny minority" still has an outsized impact. The pareto principle applies to pretty much everything.

That's as much to be attributed to the asymmetry between destruction and creation as it is to the pareto principle.

To be fair: the headline is quite clearly crafted to deliberately invite the culture war, and the clicks that come with it. The article itself rejects the premise in its very first sentence.

Genuine question here - what's the difference between them selling this 'currency' and buying in game currency on a video game? Or would those kind of things also have to comply with these kind of regulations?

Video game currency is restricted to that video game, and most if not all video games have strict regulations against trading their currency for services outside of the game.

The currency they're selling purports to be a general-use currency for real life sales.

If a video game in-game currency is "input only", as in, the value goes from the players to the company and stays there, it's effectively just a payment for a service.

If you allow transfers between users and cashing out to real money (as Epik's "Masterbucks"), then you'd have to comply with these kinds of regulations, so video games try and take steps to ensure that their currencies aren't treated like that, or at least if this does happen, they can't be seen as facilitating it. Epik's marketing material explicitly mentions both "fully transferrable" and "convertible to dollars" - this combination means that you're intentionally running a service that can be used for money transfers, and thus you need to ensure KYC (know your customer) and AML (anti money-laundering) compliance or shut down that service.

Ahh okay I see I missed the point about being able to cash it back out. That makes sense, thank you.

It's odd though cause Masterbucks isn't crypto, it's just a gift-card-esque balance service. Similar to how you'd have a PayPal "balance" you can send to other people or spend on stuff, and "top up" buy linking a CC or buying a card at 7-Eleven.

PayPal might've just realized they're a competitor.

PayPal is undeniably a money transmitter, a type of money service business that is required to required to register as such and perform certain minimum levels of compliance work.

If Masterbucks is "like PayPal" from that perspective, subject to certain de minimis thresholds, then they too are likely to require registration.

Frankly, if this is the case, and the Epik people are complaining that PayPal's due-diligence questions on these topics are "absolutely absurd, and well outside of any knowledge or experience [they] have as a domain registrar" then perhaps they oughtn't to be running that kind of a business?

It's fair, but is it PayPal's job to enforce that? If I sell MasterCard pre-paid cards at my corner store, will Visa come audit me and ask what sort of people I'm selling those cards to?

>It's fair, but is it PayPal's job to enforce that?

Yes, because it's using their payment network. I'm not sure why your example involves Visa auditing a purchase of a prepaid mastercard.

Yes. When you deposit the money you earned from your pre-paid cards in your bank account, once you reach a certain size your bank will certainly start asking how you are making money, and if you say "gift cards/cash equivalents that can be traded online" they will also start to ask you who you are selling these cards to. From the banks point of view, they don't want the FBI to come knocking saying that carders in Russia were using the banks money to launder purchases from stolen credit cards. If the bank can't cough up those records they are in hot water.

PayPal is the middleman that turns Masterbucks into cold hard cash into your bank account. If PayPal didn't enforce it, then in the eyes of the government PayPal is complicit also.

From my point of view, PayPal has a reasonable case to want to understand that its business partners are legally compliant if acting as a money service business.

Your example is not really the same. If you started using your merchant terminal to take payments on your own off-brand money transfer service, you can be pretty sure that you're going to get cut off just as soon as your processor finds out.

It is emphatically PayPal’s job to enforce it. That is the way that AML laws are written.

In the coming years, we may see the rise of separate economies based on political divide. I think this is where we are heading, and this will counterpart the world splitting the internet into nationally divided fragments.

>and this will counterpart the world splitting the internet into nationally divided fragments.

Perhaps, but how is this related to this story? Both epik and paypal are located in the US. If anything this points towards the internet being divided across partisan lines.

"political divide" from the first sentence.

I think he is just comparing it to another way in which the internet is balkanizing.

This, but also in that I think internet balkanization, if it takes off, will only make it easier to further balkanize it into "micronations" for different ideologies, or corporate brands.

Without Visa, Mastercard or Paypal on the other side how can it survive? Cryptocurrencies as the current niche are hanging on, I suspect for as long as VMP permit them (ie buying bitcoin with a credit card). Everyone else, even Apple, go through them.

> Without Visa, Mastercard or Paypal on the other side how can it survive?

Bank transfer?

Separate economies don't necessarily have to be equal in capability. One may be the dominant while the other operates closer to being a black market, while not necessarily being an actual black market.

Maybe it would be based on cryptocurrency, or a more traditional form of currency that is centralized but isn't USD, for instance. Or someone with a lot of money decides that having dominance over a new economy takes the opportunity and forms their own "competitor" to Visa, but it operates within the economy that Visa decides it doesn't want to be a part of. Then again, maybe Visa one day leaks enough customers that it decides it's not worth being as moralistic.

It's really more of a bootstrapping issue than anything. You need to accept credit cards because that's what your customers expect to pay using.

If your customers start to expect to pay using some cryptocurrency, what do you need credit cards for?

First you have to reach a critical mass for the alternative payment system, but the more legitimate businesses that PayPal boots to the other side of the wall, the more mass there is on the other side of the wall.

Genuinely curious: if it’s a growth thing, how did PayPal get where they are today? I know eBay was involved, but not much more than that.

First to market advantage, more or less.

Also, it's even not so much PayPal as Visa and MasterCard, and how they got the way they are involves both politics and backroom dealings.

Will they be significant economies though? Gab and Epik are mostly about culture wars and conspiracy theories. How many people are actively involved in those?

The history of explosive growth in tech platforms should make us very cautious about assuming small economies will stay small. It's been barely a decade since Facebook and Twitter were small platforms that didn't matter.

A decade ago Facebook and Twitter were small in a nascent industry.

A decade ago Facebook had 500 million users. Not sure that's actually that small. It took them 2 years to double, and 5 years to double again (in 2017 they hit 2 billion).

That's how we see it in retrospect, but at the time it wasn't obvious that the industry was nascent. Many people saw them as strong competitors to Myspace and Friendster rather than anything fundamentally new; even once they got clearly past Myspace, it was quite common to hear people saying that the global demand for social media is probably saturated as they continued to grow.

(And of course, it wasn't obvious that Myspace was a nascent industry either when they launched in 2003!)

Facebook and Twitter don't require buying into any particular politics to join.

But as things are going you need to have a very limited ideologically worldview to not get expelled. And I am not taking about silly things like _Hitler was nice_. Do you want recent examples?

If you mention the following (you dont even have to support it or believe it) and many people complain there is a big chance you will be banned because of hate-speech:

1. There may be genetic differences in cognitive abilities between the sexes

2. Intelligence is highly dependent on genetics which may be expressed differently depending on the population clusters. i.e. East Asian people vs Sub-Saharan groups.

3. The killed of unarmed, black males by the police is statistically insignificant in the US and it is dwarfed by other more important issues.

4. What China is doing with the Uighurs and what France is planning to do with their Muslim population is something very similar in spirit and can show the inability to host a significant muslim minority in your country without being exposed to separatism movements based on religion.

5. It is ok to say "only women" menstruate

And on and on and on. The list is growing every day.

It's true, the list is growing every day. I remember not long ago how the term "sexual preference" became considered offensive overnight, purely for political reasons. It was interesting to see even the dictionary immediately change their definition in response to some twitter drama. Despite the fact that the offense is completely baseless, since people cannot freely change their preferences.

Something happened in the last 5 years or so. I am an old school leftist, by no means a Stalinist or so, but very much in favor of the former colonies rights, against imperialism, unilateral use of force, excessive power of multinationals, militarism, that sort of stuff. Let's say I am a crazy commie in the mold of Chomsky or Howard Zinn. Well, in the last 5 years, that left "poooft", evaporated, disappeared totally and now the only "opposition"to the usual suspects is a motley group formed by ex-tumblerinas, social media companies C-executives and their employees, mainstream democrats and celebrities,twitter comedians, and the problems are not more: "Why Grenada was invaded", "What is the future of Gaza" or even "Why are unions disappearing in America?", not more "Iran-Contra" or "Somalia intevention" Now the problems are "Is JK Rowling a TERF" "Should Colin Kapernick(sp) have an extra year of contract" "Is AOC college degree more prestigious than Trump's" When the top-20 Fortune companies are on your side I think it is time to reassess your priorities as a leftist movement, but no, that is not happening.

In 2010, Facebook was worth north of $10B. What is your definition of small platform?

It happens a lot today. Advertising targets lifestyle cohorts, and political orientation is part of that. if you polled Uber and Lyft users you'd find that they have very different views of the world. Same with McDonalds and Chick-Fil-A. Last year, I was on an American Airlines flight and it was notable that they played up patriotism in a way that Delta doesn't.

I haven't flown on American in ages. How do they play up patriotism? Like, if a soldier boards they announce it kind of stuff? Because I've seen that on Delta too.

This kind of situation used to exist in the Netherlands prior to World War II: https://en.wikipedia.org/wiki/Pillarisation

I always found it crazy that my grandparents would tell me how there would be a socialist bakery and then a protestant bakery.

To be clear: the domain registrar has been cut off.

I doubt that Paypal is going to be consistent about this; _I suspect that_ illegal content and hate sites can be found in the registries of many major registrars.

Still, it's a concerning development for anyone who may be using the same registration service as a future target.

Edit: I missed that they are alleged to be laundering money.

They got cut off because they’re suspected to be laundering money, and couldn’t fill out AML forms, not because they host hate speech.

Oh? My mistake for skimming the article.

That is indeed a dumb move on their part.

I think there is room to talk about what is an appropriate due process and/or orderly shutdown process for someone operating internet infrastructure such as a payment processor, ISP, registrar, etc.

Perhaps the registrar should have been taken over by some sort of court-appointed receivership, for example? The difficulty here is that there has been no judicial process, just PayPal making a corporate decision based on their contract.

I'm not saying that Paypal wasn't justified, just wondering if there might be a way to minimize collateral damage.

When it comes to potentially laundering money, the SEC doesn't give you a lot fo time for "orderly shutdown process". You should have gotten your documents in order before the SEC starts knocking on your door.

It was Epik’s responsibility to do an “orderly process” when they started acting as a money transmitter, it’s not PayPal’s job to compensate for Epik’s failure to comply with the law. The consequence for failing to comply with legal requirements are often sudden and disrupting; Epik really should have planned for this.

Continuing to service Epik despite a failure to follow AML laws actually exposes PayPal to risk, which is why they did a hard cutoff and not a phased shutdown. “We thought they were money laundering and kept serving them for a few weeks” is how you get prosecuted too.

You are just arguing that Paypal did what was necessary given the current law/SEC regulations, which I didn't disagree with.

I was trying to lift the scope of the discussion to a larger arena in which the role of the SEC certainly could be discussed, for example. Basically asking the question "Is there a better way to manage compliance?"

There is usually going to be a better way to manage compliance. By its very nature, the effort is friction inducing.

What I think is the most interesting question is “what are the unstructured/incentives that caused us to end up where we are today”

That's called selective enforcement

Decentralize everything is a concept that should be taught as a fundamental life lesson to school children everywhere.

We should also teach them not to fall for conspiracy theories, and how to read articles carefully.

They'll need to learn about credit and how not to get a payday loan first.

Is this the same PayPal getting into cryptocurrencies? If Sathoshi were dead they would be rolling in their graves now.

This may or may not have been a political move, but the theme of certain partisans celebrating when their perceived enemies are deplatformed is disturbing, especially given the parallel phenomenon of politically inconvenient stories being termed "Russian disinformation" that's our societal imperative to suppress.

It shouldn't require too much of your imagination to wonder if one day you will be on the wrong end of this corporate shunning. Jacobin for example is complaining Facebook is blocking their pro-Marxist posts on Bolivia. If your position is "the values enforced by these trillion dollar multinational companies will surely never come into conflict with my own!" you're a fool or a stooge.

https://twitter.com/sunraysunray/status/1320078487970041856

Are you allowed to celebrate if you (as a minority group, possibly individually) are materially hurt by these platforms?

Also this is far from corporate shunning, these are deeply socially unacceptable positions too. PayPal already has a long list of things it deems unacceptable. When I worked for an artist community that had an NSFW section we got weekly threats from PayPal compliance, I don't think sites like Patreon fare much better there. I don't see how this is special. Getting banned from PayPal is far, FAR away from "being shunned by all corporations".

From the article's title: "Home to Proud Boys domain, Gab, and other right-wing sites posts unhinged letters after PayPal cuts ties"

Unhinged is a very editorial stance, signaling how the author wants us to perceive the events of the story before even word 1

Does no one else feel resistant to this kind of nudging?

Gab is a non-entity, and McInness is a bad joke. PayPal has just given both of them 10,000x more credibility than they ever had.

The Streisandining continues.

So you're saying that telling people to shut up will not actually change their minds and make the world a better place?

I don't like that. I'll give you a downvote, that will set things right!

Remember guys, PayPal Twitter Google Facebook aren't monopolies! You're free to create your own platform!

Seems like PayPal had already cut off funding for Proud Boys over a year ago? The did the same for Antifa though, so at least they are somewhat consistent.

This particular article seems less about Proud Boys and more about Epik using an "alternative currency" called "Masterbucks"...

> The right wing has long accused tech companies of anti-conservative bias. Experts say the claims are unfounded.

It's an interesting situation. Facebook particularly I would say has an overwhelming conservative bias. At least, I saw an article the other day on how the top X trending posts on Facebook are always dominated by pro-conservative pieces. However, I've also seen a ton of anti-conservative partisan fact-checking on Facebook (i.e. it's obvious the factchecker was doing everything possible to label an unfavorable article as "false" or "partly false" on a small technicality). So in my opinion, the situation is that (in the case of Facebook), the userbase and content is right-leaning, while the fact-checkers/employees are left leaning and are trying to combat their own userbase.

> [They] did the same for Antifa though, so at least they are somewhat consistent.

I don't think this is a coherent statement.

Antifa isn't an organization. The Proud Boys definitely is.

If you're not familiar with the Proud Boys, this is a good introductory video: https://www.youtube.com/watch?v=pZMWQDvZQZs

> Antifa isn't an organization

Maybe not with centralized governance like Proud Boys, but PayPal definitely cut off payment processing for "Antifa Sacramento" and "Atlanta Antifascists" last year, I remember reading about it...

I know it's difficult to comprehend but: Antifa is not an organization while "Antifa Sacramento" might be an organization.

> Antifa isn't an organization.

They have spokes people, a uniform, unified political beliefs, and meet through organised events.

I suspect the only reason they claim not to be an organisation is because they don't want to be label a terror organisation. Either way, how they choose to organise should be completely irrelevant here. If Antifa decided they were an organisation tomorrow and The Proud Boys put out a statement saying they're no longer an organisation should PayPal reverse their stance?

> I suspect the only reason they claim not to be an organisation is because they don't want to be label a terror organisation.

I suspect it's because there is no "they". All the antifa-in-the-name orgs are just loosely connected groups that espouse similar ideology.

There is no Gavin or Enrique for "antifa".

> unified political beliefs

No, they don't. As with many extreme movements, people calling themselves Antifa are a group of people of similar but nevertheless disparate outlooks, united through the principle of "the enemy of my enemy is my friend". Were Antifa to prevail over their ideological adversaries, one could expect them to then immediately descend into savage infighting, just like most other historical revolutions have.

Nor would a uniform mean that there is a united organization. Within the world of splintered Marxist parties, there is a long tradition of different groups maintaining the same aesthetic style, while nevertheless branding each other as heretical and not real communists.

Your ideological sophistication is questionable. If you've ever spent time in left discourse you'd know that leftists argue about everything. And it's not just leftists who hate fascists. It's pretty much anybody with a basic understanding of the history of the last century.

Fascism wants to start up the murder machine; and they'll tell you that it's to "purify" the nation and they'll try to present it in such a way that you think it's only "bad, dirty, disgusting" people who will be fed into it. But in the end the murder-machine will be turned against anyone and everyone until it is stopped.

The scenarios that apply to this country look less like Europe in the 1930's and more like Syria with a side of Rwanda.

The problem with modern Antifa is that the definition of "fascist" is becoming so loose and so unhinged from historical context that it is meaningless.

For example, according to many activists claiming to be associated with Antifa, if one believes that trans-rights matters are not a major priority – compared, say, to class issues – that makes one a fascist. Think of the extreme leftists of May 1968, who were fighting against what they saw as insufficiently punished or even resurgent fascism. Since advocating for sexual minorities was not a central part of their struggle (even feminism or gay men’s issues were at the margins), we are supposed to assume that those anti-fascists were themselves fascist. That’s absurd.

> The problem with modern Antifa is that the definition of "fascist" is becoming so loose and so unhinged from historical context that it is meaningless.

I don't buy this narrative. Most of the anti-fascist activists I know adhere to the definition in Ur-Fascism: https://www.nybooks.com/articles/1995/06/22/ur-fascism/

The reason they are organized is such a dis-organized manner is b/c of the fbi and other state and federal agencys that have historically targeted the left. Can't kill or imprison a groups leaders if it has 100's of heads.

They're an organization as much as any decentralized structure can be. Is Mastodon an "organization", and can said imaginary "Mastodon" organization, or Rochko and any contributors to the project anyway be held liable for the goings-on in individual instances that are meant to be autonomous by design?

This is why the media establishment (Google, Facebook) hated Bitcoin so much. Because it gives financial viability to independent thought.

r/independent thought/rampant, virulent racism and white supremacy/

To be fair, it did both.

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