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Skullgirls Paypal account temporarily frozen due to chargeback fears

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Skullgirls developer Lab Zero Games was unable to pay employees over the weekend due to Paypal freezing the company's account, according to posts from CEO Peter Bartholow on NeoGAF.

Lab Zero's account was frozen because Paypal anticipated a number of chargeback requests should backers of the company's Indiegogo crowdfunding ampaign not get their favorite characters as DLC, according to Bartholow.

"Paypal's freeze on our account is making it so that I can't pay people today," he wrote.

"I sent them all the documentation they asked for last night, hoping it would be resolved today, but didn't hear anything back," he added. "I also immediately filed a complaint with the [Consumer Financial Protection Bureau] because this whole thing seems decidedly non-kosher."

Bartholow wrote that he spoke with the team at inXile, who have had previous success funding both Torment: Tides of Numenera and Wasteland 2 via Kickstarter, and they told him backing through Amazon Payments had "no similar issues, despite dumping several times the amount we have into their bank accounts."

Paypal asked Lab Zero to shoulder the risk of chargebacks, but Bartholow declined.

"They also asked if we're good for the $700,000 if something goes wrong," he wrote. "I said 'No,' because, well we're not? The whole point of crowdfunding is to give us the money to develop stuff, not take out a loan."

Paypal has since unfrozen Lab Zero's account but is keeping $35,000 "as collateral." Bartholow told Venturebeat he can now "get back to paying [Lab Zero's] contractors" but his complaint with the CFPB stands. Voting for the final DLC characters for Skullgirls continues on the game's Facebook page.