Paypal releases Indiegogo campaign’s funds

Once again the internet's ability to bring like minded people together to help fight injustice has been proven. Just yesterday we reported on how Paypal had frozen the account of Yatagarasu Attack on Cataclysm developers, after they withdrew half of their Indiegogo raised funds, with the online-loan-shark suggesting that it would only release the rest when the game was complete. Naturally the internet wasn't best pleased with this and a campaign on behalf of the developers was arranged, with people tweeting and emailing Paypal for a response. Now, less than 24 hours later, Paypal has released the total funds.

“I’m relieved to announce that today we received an email from PayPal's ‘Office of Executive Escalations’, advising us that they have released all reserve funds and removed all reserve settings from our account,” reads the Indiegogo campaign page.

“This comes as a HUGE relief for all involved in the development of Yatagarasu AoC, as the money raised by our contributors is vital to the game development and pursuing alternative arrangements at this timing would have been hugely problematic.”

The developers then go on to issue a massive thank you to everyone involved, believing that if you hadn't played your part in emailing and tweeting Paypal to raise the profile of this case, that it may not have released those funds in time to see the game be made. For now, the developers are simply cracking on with getting rewards out to backers and beginning full time development of the game.

“Bicep Ninja thanks you for your support”

Following on from our coverage of this event yesterday, Paypal also got in touch with KitGuru to release the following statement:

“We have reached out to Nyu Media and the issue has been resolved. We want to reiterate that supporting these campaigns is an exciting new part of our business. We are working closely with industry-leaders like IndieGoGo and adapting our processes and policies to better serve the innovative companies that are relying on PayPal and crowd funding campaigns to grow their businesses.”

It continues: “We never want to get in the way of innovation, but as a global payments company we must ensure the payments flowing through our system around the world are in compliance with laws and regulations. We understand that the way in which we are complying to these rules can be frustrating in some cases and we've made significant changes in North America to adapt to the unique needs of crowd funding campaigns. We are currently working to roll these improvements out around the world.”

Many times when Paypal has held money in “reserve” in the past, it's been to do with preventing money laundering – which understandably, it wants no part in – but in this case that could hardly be argued. It's clear from the campaign that the money came in from many different sources and was crowd funded together. Originally it was claimed that Paypal was withholding funds in case the game wasn't finished and backers demanded refunds from Paypal, but there was no mention of that in the Paypal statement.

Of course this isn't the first time Paypal has frozen an account without legitimate cause. Just last month it was accused of keeping in reserve, the funds for a child's cancer treatment that had been raised through campaign funding. This was eventually corrected and claimed to be a mistake by the financial firm.

KitGuru Says: It seems to me that Paypal got caught with its pants down here. It underestimated the stink, that a large group of annoyed campaigners and their morally aligned colleagues around the world, can create. Well done all. 

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