PRQ, the infamous ISP created by Fredrik Neij and Gottfrid Svartholm of The Pirate Bay, has been nuked by PayPal. After a fruitful partnership lasting three years, PayPal decided to ruin their relationship with the so-called "bullet-proof" hoster by freezing the company's funds for up to 180 days. On PayPal's advice PRQ opened a second account to get by while the dispute was being sorted out, but then without warning PayPal seized those funds too.

While most webhosts go about their day to day business without most people knowing they even exist, Sweden’s PRQ has a habit of making international headlines a few times every year.

The ISP, created in 2004 by Gottfrid Svartholm and Fredrik Neij of The Pirate Bay, usually hits the news due to their business strategy. PRQ’s philosophy says that if a website is legal in Sweden, they will not only host it, but defend it to the end. That has made it a haven for controversial sites that are less welcome elsewhere.

Time and again PRQ’s affiliation with The Pirate Bay and other file-sharing domains has seen the company raided, most recently during early October when authorities hunted down the operators of Tankafetast and Appbucket and took down dozens of sites in the process.

PRQ is known for respecting the privacy of its customers, even going as far as accepting cash in envelopes from website operators requiring the highest levels of protection. However, a decision just taken by PayPal might mean that this archaic method of payment becomes more popular in the months to come.

After targeting dozens of file-sharing, file-hosting and Usenet services in recent months, PayPal has just banned PRQ from its service and seized all its funds, not once but twice.

“First they froze our primary account without any prior notice – we can’t even receive funds to it,” PRQ told TorrentFreak in a statement.

“After we contacted their ‘support’ they stated that the support could not help us, BUT the person who was responsible for our account should contact us within a couple of days.”

As of today, PRQ are still awaiting that call, despite having a trading relationship with PayPal for the last three years.

PRQ told us that since PayPal is a big source of payments for the ISP they need to be able to process funds while their account is frozen. So the company asked PayPal for a solution.

“PayPal stated that we just had to open a new account to receive funds to until the primary account problem was resolved, and once it was resolved they would merge the two accounts,” PRQ explained.

That all sounded simple enough, but “PayPal dispute” and “straightforward” aren’t usually terms seen in the same sentence together, and this occasion was no different.

“So we started a second account, and that got frozen too so that we could not withdraw the funds, although we still can receive funds to the account,” says PRQ.

Not content with freezing two accounts, last week PayPal sent an email stating that they will be keeping all funds in PRQ’s primary account for up to 180 days to act as a reserve in case of any chargebacks. PRQ informs us that historically there have been almost none of those.

“That was it for us, that made us decide to discontinue PayPal forever. It’s sad that PayPal decided to f*ck us after three years of service,” PRQ concludes.

In the meantime PRQ is accepting Bitcoins and bank wire transfer while their Visa/Mastercard merchant account is being set up.