But the post never explained what the situation was... just that they "explained 'it'" to Paypal..

They also don't explain what they are accepting payments for, other than "receiving some minor payments and paying for a few online services"

I suspect there is far more to this story.

They have no idea why they've been terminated and PayPal won't tell them. From the article:

> We never thought this would happen and have absolutely no clue what they’re referring [to]. We have reviewed the user agreement multiple times and there is absolutely nothing there that we’ve engaged in.

Is there any law or regulation that requires institutions that handle money handling services to be transparent in cases like this or with any right to recourse? (In any country)

What happens if a multinational organisation based in one country has that right but doesn’t in another - but it’s a single PayPal account - could they get reinstated that way?

In the US, yes, if the organization is legally considered a bank. I believe that PayPal is not considered a bank, but I'm not sure on the specifics as to why.

Paypal Europe has a banking license.

Great minds... :)