One of the reasons why PayPal so paranoid is to prevent money laundering. In fact this could be _the_ factor because any mis-step would land PP itself in big trouble and could be fined a lot of money. My guess is PP would rather err on the side of its own safety.
Another cause that it will freeze an account is when it suspects the account is used for illegal activities (e.g. selling fake goods).
Please note I am in no way implying the OP is involved in any of these. I am just making some guess on why PP may shut down/freeze accounts.
Money launderers typically like to avoid leaving a trial and I would think PayPal keeps a very accurate trial of where its money flows. And since they are regulated as a bank (at least in the EU) I suspect PayPal will simply need to hand over that information to the authorities when asked.
I doubt it. Money launderers never do chargebacks and never make complaints. They are _the_ ideal banking customer, which is why the tax man hates on them.
Another cause that it will freeze an account is when it suspects the account is used for illegal activities (e.g. selling fake goods).
Please note I am in no way implying the OP is involved in any of these. I am just making some guess on why PP may shut down/freeze accounts.