PayPal has put the brakes on the Indiegogo campaign for Skullgirls, leaving Lab Zero Games unable to pay its staff.

The money transfer service withheld funds, saying it was not willing to take the risk that backers would demand refunds at the end of a poll to select which DLC characters will be developed.

The service offered to unfreeze Lab Zero’s funds if it would agree to take on the burden of providing refunds if necessary, but the developer refused; the point of its crowd-funding campaign is to provide money for development costs, and it’s going to spend it, not fill up a silo and go swimming.

Lab Zero CEO Bartholow took to NeoGAF to vent his frustrations, and in a series of posts collated by GamesIndustry, revealed that PayPal finally unfroze the account but withheld $35,000 as collateral. Other developers have not experienced this problem using rival services like Amazon, Bartholow said, and he has filed a complaint with the Consumer Financial Protection Bureau.

The vast majority of Skullgirls backers used PayPal to donate, so the service was sitting on $700,000 of the $829,000 raised through Indiegogo.

Lab Zero Games originally asked for just $150,000 to develop a single DLC character, but netted enough to make four, with story and stages for three of them, among with a host of other goodies for backers and fans. Skullgirls is available on PlayStation 3 and Xbox 360 and is headed to PC.