Hacker group Anonymous continued its battle with PayPal this week, encouraging users to cancel their accounts over recent arrests and the company’s refusal to handle transactions for whistleblower site Wikileaks.

The effort, dubbed Operation PayPal (or #OpPayPal), kicked off around 4am Eastern time and called on Anonymous supporters to “immediately close their accounts and consider an alternative.”

“The first step to being truly free is not putting one’s trust into a company that freezes accounts when it feels like, or when it is pressured by the U.S. government,” Anonymous said in a note posted to Pastebin. “PayPal’s willingness to fold to legislation should be proof enough that they don’t deserve the customers they get. They do not deserve your business, and they do not deserve your respect.”

In December, Anonymous organized a distributed denial of service (DDoS) attack against PayPal, Amazon, Visa, and MasterCard after the companies pulled their support for Wikileaks, which had recently dumped 250,000 State Department cables. At the time, PayPal said the move was in response to “a violation of the PayPal Acceptable Use Policy” because Wikileaks “was encouraging sources to release classified material, which is likely a violation of the law by the source.”

Earlier this month, the Department of Justice announced the arrest of 16 people for Anonymous-related DDoS attacks, 14 of whom were linked to the December PayPal attacks. Those arrested ranged in age from 20 to 36.

The arrests “outraged” Anonymous, prompting the #OpPayPal effort.

“Anonymous ‘suspects’ may face a fine of up to 500,000 USD with the addition of 15 years’ jailtime, all for taking part in a historical activist movement,” Anonymous said. “What the FBI needs to learn is that there is a vast difference between adding one’s voice to a chorus and digital sit-in with Low Orbit Ion Cannon, and controlling a large botnet of infected computers. And yet both of these are punishable with exactly the same fine and sentence.”

In a recent tweet, @AnonymousIRC said “at least 35,000” PayPal accounts had been shut down since the operation started, though it did not reveal how it came across that data. In a statement, PayPal said “we haven’t seen any changes to our normal operations (including account opening and closing) overnight.”

Anonymous also said PayPal shut down its “Close Account” Web site, though in a quick test, I was able to access the “Close Account” page on my own account. Anonymous urged those who were having trouble to call PayPal via its 1-888 number or try again tomorrow.

Wikileaks, meanwhile, said today that it will sue PayPal, Visa, and MasterCard in the U.S. and Europe if the companies do not re-open payments to the site by next Thursday. In a recent video Wikileaks said the banking bans have resulted in donation losses of $15 million.

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