PayPal acts as a bank without having to follow any banking laws. You have 10k in your PayPal account and PayPal decides its theirs? No recourse for you.
Just search paypal took my money and you can read all the horror stories.
I only have PayPal linked to a credit card, so I can always pit that ruthless company against them, I guess. But it does sour me on them if that's how they treat their merchants