they've been fined 480k for "failing to adhere to anti-money laundering regulations", PYYPL cooperated & agreed to settle & pay the fine to which they received a discount of 20% (the fine was originally set at 600k), probably they're upgrading their system to comply with the regulations
Sounds like a plausible reason. So the so-called "upgrades on the card system" are just a stalling tactic. Never have I seen a legitimate upgrade that take ages without even any ETA. In fact, for such upgrades, they even make alerts to customers in advance. What made matters worse was that the "upgrade" was selective in the beginning, and now it seems general.
So, from what I understand the government think they don't have a good monitoring system to check if their user is doing money laundering or not. This makes it a bit surprising if the number of KYC requests as mentioned by others is true. In other words, they don't really monitor user's activity but will keep their personal data updated as often as possible. What kind of upgrades are they doing then? Are they saying that it will apply a more strict monitoring process for every transaction?
According to the article, it looks like Government started investigating them way back when their KYC/AML policies were still not strict. I can confirm this because when I first opened an account with them, all they needed were just basic details. They started requesting for more details from customers later, probably due to panic after realizing they were in trouble or were going to be fined a lot of money.