If this is a surprise, you did not do your due diligence. Paypal has acted this way for a decade for less risky items than BTC.
Ebay, ok. Paypal, wtf people?
i have been doing due diligence while you are still in diapers, paypal has largely ignored and allowed physical bitcoin sales until beginning of this year when some kind of new policy triggered a massive account review on everything bitcoin related that's considered high value sales, including physical coins.
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Also guys as much as i appreciate the suggestion to sue, it is not practical. The amount of resource and time you need to allocate to even get a hearing against those large companies with a full legal team of lawyers/ops is not realistic financially for the average person even if you have the means, considering the return even if you win - risk/reward.
Your best bet is file with the BBB and hope the company will take action, i did that once against ebay with good success, cut through all the low level zombies and talked to one of their veepees who promptly resolved the issue.
I agree though ebay and paypal are like the modern day gangsters, can kill your business with 1 shot and no apparent reason, all sellers live in fear of them.
You don't have to sue them but you should write a letter to the State Department of Financial Services and ask that they investigate PayPal.