Paypal have known that Hotfile.com have been a problem for years.
In 2011 a lawsuit was issued which named 1000 users and Paypal over Hotfile and copyright infringement:
http://torrentfreak.com/hotfile-1000...awsuit-110118/
In 2012 the MPAA said that Hotfile was on par with MegaUpload on scale of infringement.
http://torrentfreak.com/hotfile-as-b...-court-120307/
Yet content like the content described below is easily available on Hotfile.com and it can all be purchased using Paypal. In fact Paypal is the primary payment method for a Hotfile account.
There is so much of it that even using our automated tools, we could not capture the extent of the problematic content available on Hotfile.com.
There is child pornography, bestiality, rape, incest and other such content. Where content has been reported, we have monitored the very same content re-appearing. There seems to be no effective repeat offender policy.