Male Contraceptive Project Loses $13,000 Bitcoin Donation Because of Payment Limit
Vasalgel, an experimental male contraceptive, lost a $13,000 donation in Bitcoin because their processor, BitPay, rejected the donation.
Experimental male contraceptive project Vasalgel received a Bitcoin donation attempt valued at $13,000 last month. Unfortunately, the donation was refused.
Via a Facebook post, Vasalgel announced the failed donation and pleaded with the would-be donor to repeat the attempt:
“OMG, someone just tried to donate $13,000 of Bitcoins to support Vasalgel development, but it was declined because it's over the $10,000 daily limit! Bitcoin is totally anonymous, so we can't contact them to let them know they can split the donation. Whoever you are, please try again!”
Donation rejected because of BitPay’s transaction limit
The Parsemus Foundation, which is responsible for the development of the experimental contraception, uses BitPay to process Bitcoin donations. According to Vasalgel, the donation was rejected because it hit BitPay’s $10,000 limit. The limit has since been raised so that future donation attempts will not be declined.
At time of writing, the would-be donor has still not been identified, and the donation has not been re-attempted.
Traditional financial restrictions go against what makes Bitcoin great
The refusal of Vasalgel’s donation represents a challenge only presented to Bitcoin users who go through a third-party platform such as BitPay following traditional financial regulations, according to Wall of Coins CEO Robert Genito.
“Just hold onto the coins and not allow the customer to use them until the customer supplies more information on their business. Who's to say the [sic] donator has access to that private key still? Who's to say the [sic] donator doesn't have to jump through hoops to get that donation back--such as the case where the donation was sent from an institutional market? Who's to say the donator is going to feel as generous after the price jumped up?”
Susanne Tarkowski Tempelhof, Bitnation’s CEO, further commented on the restrictions provided by traditional corporate entities compared with decentralized projects.
“I can understand BitPay's regulatory stance, since their clients are merchants who are used to and expect to interact with old world legacy entities like banks and governments. However, as the recent DAO 132 Million USD crowdsale showed us recently, legacy entities [sic] seems like they'll become a thing of the past faster than anyone had previously anticipated. Long term, centralised entities like BitPay who'll need to pay huge amounts in legal fees to be regulatory compliant instead of spending that money on product development, will not be able to compete against DAOs and other similar entities. Being a centralised company incorporated in a government backed jurisdiction is a liability, not an asset.”