A few days ago Ars Technica ran a really interesting story on a little crowdfunding project called Mailpile which had its crowdfunding money frozen by PayPal. “The idea of crowdfunding is relatively new, and…Paypal has to manage the risk model and also the regulatory and compliance issues in every market in which we operate,” Anuj Nayar, Paypal’s Senior Director of Global Initiatives, told Ars. “We’re working very diligently with some of these crowdfunding organizers to work out the system,” he added. “Right now, I’d love to be able to say that tomorrow we’re going to be issuing new guidelines, but it’s more complicated than that—it really is dependent on where people are located. We have to remain in compliance around the rules depending on which market both the crowdfunding organizer is, and also their customers. If it was an easy problem we would have fixed it already!” In other words, PayPal doesn’t know how to handle crowdfunding just yet. Are these payments or donations? What are the legal rules and loopholes and other potential problems involved? It’s actually a complicated issue, and I can sympathize with PayPal here when it comes to setting up clear guidelines. How they’re going about handling it, […]
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