Mailpile Reaches Fund Goal But Can't Access Money Thanks To PayPal

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Mailpile, a crowdfunding initiative from Iceland that aims to provide email security in response to the revealed National Security Agency programs, has hit a road bump in their fundraising efforts thanks to PayPal.

Despite raising a total of $135,000 out of their $100,000 goal with six days left for people to donate, the web-mail client that aims to provide free, secure and open source software, may not be able to use all their fundraised and donated money.

PayPal has frozen Mailpile’s account and is withholding $45,000 of the total raised, reserving its right to hold onto money until Mailpile comes up with a budgetary breakdown of how the donations will be used, according to ArcticStartup.

Bjarni Einarsson, tech lead for Mailpile took to the company’s blog to write that PayPal’s justification for withholding the money is a “concern about charge-backs,” and that they may not release the block on the account for one year if the company does not provide the requested budgetary breakdown. However, Einarsson affirms that PayPal has no jurisdiction to ask for a budget of their business.

In response to not knowing when they will get access to the $45,000 Einarsson wrote, “rest assured, we are not taking this lying down and intend to put pressure on the company.”

In the same update Einarsson addressed Mailpile supporters and said that while they understand if their supporters are upset with PayPal, they request that “nobody cancel their payments or take any action aside from speaking out.”

The company assured its supporters that “enough people have funded us directly through IndieGoGo and we have enough savings that we will be able to keep our word and make Mailpile happen.”

Sources: Arctic Startup, Mailpile

Update: PayPal has notified Opposing Views that it has released Mailpile's crowdfunding. Official statement below:

"We have reached out to MailPile and the limitation has been lifted. Supporting crowd funding 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. 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."