If you use paypal as a seller, you've been being notified for over a year now that new government regulations require paypal to report to the IRS sales in excess of 20,000 dollars and 200 transactions per year. They need to have your SSN or tax number to report this to the IRS on form 1099-K. Since they don't know until after the fact whether you'll meet those thresholds, they require the SSN from anyone receiving money through paypal.
Here is the paypal information that explains it. This is not a hoax, this is the law. If you don't give them your SSN, they won't/can't allow you to use paypal to do business.
https://cms.paypal.com/us/cgi-bin/ma...ng_us/IRS6050W