PayPal Releases Funds to WikiLeaks as Supporters Strike Back

PayPal has just released the remaining funds in the account associated with WikiLeaks today, after restricting access to the account last week, according to a PayPal blog post.

The release of funds follows a number of denial-of-service attacks earlier this week that were aimed at the document-leaking site’s providers. Most of the providers are now refusing to work with WikiLeaks after the U.S. government accused it of being in possession of documents that were provided in violation of U.S. law.

Yesterday, WikiLeak’s founder Julian Assange was arrested and denied bail in London. He’s accused of sexual misconduct in Sweden.

While PayPal is releasing the residual funds to WikiLeaks, it is not reinstating the ability for it to receive donations.

PayPal was caught up in a brief media storm this morning, after PayPal’s VP of Platform Osama Bedier gave the impression at LeWeb in Paris that PayPal had cut off access to WikiLeaks because of direct pressure by the U.S. government.

PayPal now wants to set the record straight, and says that it reviewed its policies regarding WikiLeaks after the U.S. Department of State publicized a letter stating that WikiLeaks may be in possession of documents that were provided in violation of U.S. law. The letter was published, and not sent to PayPal directly.

“PayPal was not contacted by any government organization in the U.S. or abroad. We restricted the account based on our Acceptable Use Policy review,” writes PayPal’s General Counsel John Muller. “Ultimately, our difficult decision was based on a belief that the WikiLeaks website was encouraging sources to release classified material, which is likely a violation of law by the source.”

Further, the company disclosed that twice before–in 2008 and 2009–PayPal reviewed and restricted the account associated with WikiLeaks “for reasons unrelated to our Acceptable Use Policy. As soon as proper information was received from the account holder, the restrictions were lifted.”

PayPal has been one of many providers that have been the victim of computer attacks, where servers were inundated with traffic. A spokesperson told us that it mostly affected the company’s blog site, and did not directly affect its payments services.

Other affected companies include MasterCard and Swiss bank PostFinance, The Wall Street Journal reports. No one is yet claiming responsibility for the attacks, but some say they are being organized by the ad hoc “Operation Payback.”