PayPal Freezes Diaspora* Account, Disrupts Fundraising Efforts

Diaspora* the open source social network that arose out of privacy issues associated with Facebook last year, recently reached out to the community for donations to sustain the network, which was all well and good until PayPal shutdown their account.

"We immediately made several phone calls, and were told they needed additional documentation, such as our certificate of incorporation, which we supplied," Peter says. "It proves we're legitimate. Yet this morning they emailed us that our "appeal" was denied and that our money is locked up for 180 days(!). We called them again and were told that they had now blocked all incoming donations."

The company is currently working on a solution by using Stripe, a new payment startup, and they expect to have payments back online soon.