[dogma1138]

It's not about onboarding/general KYC since this isn't about end users.

Paypal does it's own risk assessment for business partners, what I'm pretty sure this is is a simple "classification" case.

Paypal classifies the type of business you are and if you belong to certain types of businesses they put some requirements on you based on regulations and their own internal requirements usually produced by their legal department.

Paypal has probably seen what happened to file sharing websites like Mega and if you are tagged as a file sharing service they want to ensure that you do everything to prevent it being used for piracy, including being able to audit it themselves and to be able to either put pressure on you or cut off their services if they think they are at too much of a risk.

Now I understand that Seafile isn't anything like Mega but It's also not exactly on the scale of dropbox this also means that most likely no one at Paypal really knows what it is, or where they are heading business wise and so they just stick some additional requirements on them.

Also (this is true for 2-3 years ago, I don't know if it is still the case) filesharing websties and other sites that you can buy "premium currency" such as various online games, vidoe chat apps (usually porgnography) etc. are the main source of fraud for compromised accounts as far as Paypal goes this on it's own can bring on additional requirements from Paypal.