What is the ruling on what happened, and is Zakat obligatory on the questioner, knowing that his brother spent the entire amount of cash without his knowledge? Is he sinful for not paying Zakat on the amount in his PayPal account, from which he cannot withdraw funds in cash? Does he pay Zakat after deducting 1% of the amount or not? Is he entitled to reclaim the full amount including the 1%, knowing that his brother used the amount via Visa and 1% was deducted from it?

The 65,000 (currency unit) in your PayPal account, if a full year has passed on it, zakat (definition) is immediately due on it. The zakat is due on the lender. You can use another person's card to withdraw it, and the withdrawal fees are not counted as part of the zakat. If you lend this amount to your brother, then zakat is only due on the amount you lent, and its hawl (one-year period) is linked to its original hawl. It is not permissible for the borrower to return more than he took, so as not to be usury (riba). It is permissible to stipulate that the borrower bears the withdrawal fees. Dealing with PayPal is forbidden, and fatwas have been issued to that effect. As for the 35,000 (currency unit) in cash that your brother spent without your permission, it is a debt upon him if he acknowledges it, and the ruling on its zakat is as previously stated.