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Paypal is doing their due diligence, attempting to protect the financial interests of their company and both involved parties.
My local bank has done the same, freezing deposits twice on large wire transfers to ensure that the transaction is legit and both parties are satisfied. For me, it's an acceptable part of the business environment and though inconvenient, is anticipated.
It comes down to the individual...is the acceptable risk/hoops offset by the value of the service, for me, it is.
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Wooster, OH