This all started in September of 09 when the FDA was still confiscating e-cig shipments and claiming they were illegal drug delivery
devices. A certain batch of ANTZ who shall remain nameless but whose initials spell out the word for the substance that falls from the tip of a lit cigarette (we don't mention them anymore so they don't get the satisfaction of coming up in searches. Google said word along with anti-smoking and it will come up though if you're curious) sent Paypal a
threatening letter saying they could be legally responsible for processing payments on illegal demon e-cigs. Paypal believed them and folded like a house of cards. I understand their side at the time however, since this group's head was instrumental in getting smoking banned from airplanes.
Fast forward 4 years however and we're still in the same boat. Paypal will limit or even shut down the account of anyone in the U.S. (as well as Canada & Brazil) found selling e-cigarettes
through them. Technically, e-cigs aren't allowed on Ebay either, but most get around it by not mentioning that particular word in their listings. It's also possible that Ebay has backed off on their policies somewhat as well, since they realized that they were losing out on an unbelievable amount of money by being a bunch of stuffed shirts over the situation.
By the way, from what I understand e-cigs are illegal in Brazil as a whole thanks to the same individual and organization. Luckily they have kind of faded into the background since their founder and head retired, but very few of us who were around for the original drama tempt fate.