Feature: Stop SOPA

The Fall of a File Sharing Giant: For Megaupload, SOPA Might As Well Have Passed

Author: Christina Thomas
Published: January 24, 2012 at 5:28 am

On Friday Jan 20, the Federal Bureau of Investigation showed the potential power of the un-passed bill SOPA, and put the clamps on the file sharing giant Megaupload. The FBI then sent an official request to New Zealand police force to bring in the brainchild, a Mr. Kim Schmitz (who’d legally changed his name to Kim Dotcom) and his co-conspirators for justice. On Monday, in a real-life display of the domino effect, the similar file-sharing sites Filesonic and Uploaded.to have severely modified their terms of service; because profiting from the file-transfer of copyrighted files lies under an umbrella suite of charges: racketeering, money laundering and copyright infringement. Think of it as running from the cops: they can get you for evading arrest, disturbing the peace, and perhaps 4-5 other things for that single act.

Megaupload was one of the largest and most popular file-sharing and file-hosting sites in the world. Based in Hong Kong, it was created by the German national Kim Schmitz in 2005, expressly for the purposes of enabling users to send files too large for email and cumbersome for the period FTP to handle; somewhere along the way, however, it morphed into an online engine to drive the dreams of a wannabe playboy, while costing the entertainment industry over half-a-billion dollars thru copyright infringement (and netting a personal fortune of $172 million for Mr. Dotcom and his partners). For a stretch of several years, Kim was pulling in over $100,000 per day from Megaupload and advertisers; which he used to luxurious effect: a $20 million mansion in pristine countryside, $5 million in vehicles, $8 million in bank accounts, and $50 million in liquid assets – and almost certainly more, as New Zealand police uncover his paper trail.

Seventy uniformed and armed New Zealand police officers stormed the Megaupload founder’s abode over the weekend, at the FBI’s request. Mr. Dotcom seemed lost in a haze of video-game and movie-inspired virtual reality in his lavish New Zealand mansion, as he attempted to hide from authorities behind an elaborate network of electronic countermeasures. Newsflash: once they know where you are, a small army of supporters won’t save you – see Hussein and bin Laden for reference. The shame of it all is that Kim Schmitz was rich long before he concocted and executed the idea of Megaupload; as a top-tier computer hacker, he’d already amassed a comfortable nest egg by using his talents as a network administrator for computer security firms in his native Germany; and later with lucrative – though sometimes illegal – investments.

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Article Author: Christina Thomas

Christina Thomas is currently an astrophysics grad student who blogs about Finance, and also helps provide content for the Vivariums Tank hub in her very limited spare time. With her partner, she owns and controls several websites like her personal …

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