Tag Archives: prison

Hong Kong Customs Arrest Pirate Streaming Device Vendors

Post Syndicated from Andy original https://torrentfreak.com/hong-kong-customs-arrest-pirate-streaming-device-vendors-180529/

As Internet-capable set-top boxes pour into homes across all populated continents, authorities seem almost powerless to come up with a significant response to the growing threat.

In standard form these devices, which are often Android-based, are entirely legal. However, when configured with specialist software they become piracy powerhouses providing access to all content imaginable, often at copyright holders’ expense.

A large proportion of these devices come from Asia, China in particular, but it’s relatively rare to hear of enforcement action in that part of the world. That changed this week with an announcement from Hong Kong customs detailing a series of raids in the areas of Sham Shui Po and Wan Chai.

After conducting an in-depth investigation with the assistance of copyright holders, on May 25 and 26 Customs and Excise officers launched Operation Trojan Horse, carrying out a series of raids on four premises selling suspected piracy-configured set-top boxes.

During the operation, officers arrested seven men and one woman aged between 18 and 45. Four of them were shop owners and the other four were salespeople. Around 354 suspected ‘pirate’ boxes were seized with an estimated market value of HK$320,000 (US$40,700).

“In the past few months, the department has stepped up inspections of hotspots for TV set-top boxes,” a statement from authorities reads.

“We have discovered that some shops have sold suspected illegal set-top boxes that bypass the copyright protection measures imposed by copyright holders of pay television programs allowing people to watch pay television programs for free.”

Some of the devices seized by Hong Kong Customs

During a press conference yesterday, a representative from the Customs Copyright and Trademark Investigations (Action) Division said that in the run up to the World Cup in 2018, measures against copyright infringement will be strengthened both on and online.

The announcement was welcomed by the Cable and Satellite Broadcasting Association of Asia’s (CASBAA) Coalition Against Piracy, which is back by industry heavyweights including Disney, Fox, HBO Asia, NBCUniversal, Premier League, Turner Asia-Pacific, A&E Networks, Astro, BBC Worldwide, National Basketball Association, TV5MONDE, Viacom International, and others.

“We commend the great work of Hong Kong Customs in clamping down on syndicates who profit from the sale of Illicit Streaming Devices,” said General Manager Neil Gane.

“The prevalence of ISDs in Hong Kong and across South East Asia is staggering. The criminals who sell ISDs, as well as those who operate the ISD networks and pirate websites, are profiting from the hard work of talented creators, seriously damaging the legitimate content ecosystem as well as exposing consumers to dangerous malware.”

Malware warnings are very prevalent these days but it’s not something the majority of set-top box owners have a problem with. Indeed, a study carried by Sycamore Research found that pirates aren’t easily deterred by such warnings.

Nevertheless, there are definite risks for individuals selling devices when they’re configured for piracy.

Recent cases, particularly in the UK, have shown that hefty jail sentences can hit offenders while over in the United States (1,2,3), lawsuits filed by the Alliance for Creativity and Entertainment (ACE) have the potential to end in unfavorable rulings for multiple defendants.

Although rarely reported, offenders in Hong Kong also face stiff sentences for this kind of infringement including large fines and custodial sentences of up to four years.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN reviews, discounts, offers and coupons.

Fully-Loaded Kodi Box Sellers Receive Hefty Jail Sentences

Post Syndicated from Andy original https://torrentfreak.com/fully-loaded-kodi-box-sellers-receive-hefty-jail-sentences-180524/

While users of older peer-to-peer based file-sharing systems have to work relatively hard to obtain content, users of the Kodi media player have things an awful lot easier.

As standard, Kodi is perfectly legal. However, when augmented with third-party add-ons it becomes a media discovery powerhouse, providing most of the content anyone could desire. A system like this can be set up by the user but for many, buying a so-called “fully-loaded” box from a seller is the easier option.

As a result, hundreds – probably thousands – of cottage industries have sprung up to service this hungry market in the UK, with regular people making a business out of setting up and selling such devices. Until three years ago, that’s what Michael Jarman and Natalie Forber of Colwyn Bay, Wales, found themselves doing.

According to reports in local media, Jarman was arrested in January 2015 when police were called to a disturbance at Jarman and Forber’s home. A large number of devices were spotted and an investigation was launched by Trading Standards officers. The pair were later arrested and charged with fraud offenses.

While 37-year-old Jarman pleaded guilty, 36-year-old Forber initially denied the charges and was due to stand trial. However, she later changed her mind and like Jarman, pleaded guilty to participating in a fraudulent business. Forber also pleaded guilty to transferring criminal property by shifting cash from the scheme through various bank accounts.

The pair attended a sentencing hearing before Judge Niclas Parry at Caernarfon Crown Court yesterday. According to local reporter Eryl Crump, the Court heard that the couple had run their business for about two years, selling around 1,000 fully-loaded Kodi-enabled devices for £100 each via social media.

According to David Birrell for the prosecution, the operation wasn’t particularly sophisticated but it involved Forber programming the devices as well as handling customer service. Forber claimed she was forced into the scheme by Jarman but that claim was rejected by the prosecution.

Between February 2013 and January 2015 the pair banked £105,000 from the business, money that was transferred between bank accounts in an effort to launder the takings.

Reporting from Court via Twitter, Crump said that Jarman’s defense lawyer accepted that a prison sentence was inevitable for his client but asked for the most lenient sentence possible.

Forber’s lawyer pointed out she had no previous convictions. The mother-of-two broke up with Jarman following her arrest and is now back in work and studying at college.

Sentencing the pair, Judge Niclas Parry described the offenses as a “relatively sophisticated fraud” carried out over a significant period. He jailed Jarman for 21 months and Forber for 16 months, suspended for two years. She must also carry out 200 hours of unpaid work.

The pair will also face a Proceeds of Crime investigation which could see them paying large sums to the state, should any assets be recoverable.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN reviews, discounts, offers and coupons.

Maliciously Changing Someone’s Address

Post Syndicated from Bruce Schneier original https://www.schneier.com/blog/archives/2018/05/maliciously_cha.html

Someone changed the address of UPS corporate headquarters to his own apartment in Chicago. The company discovered it three months later.

The problem, of course, is that there isn’t any authentication of change-of-address submissions:

According to the Postal Service, nearly 37 million change-of-address requests ­ known as PS Form 3575 ­ were submitted in 2017. The form, which can be filled out in person or online, includes a warning below the signature line that “anyone submitting false or inaccurate information” could be subject to fines and imprisonment.

To cut down on possible fraud, post offices send a validation letter to both an old and new address when a change is filed. The letter includes a toll-free number to call to report anything suspicious.

Each year, only a tiny fraction of the requests are ever referred to postal inspectors for investigation. A spokeswoman for the U.S. Postal Inspection Service could not provide a specific number to the Tribune, but officials have previously said that the number of change-of-address investigations in a given year totals 1,000 or fewer typically.

While fraud involving change-of-address forms has long been linked to identity thieves, the targets are usually unsuspecting individuals, not massive corporations.

Infamous ‘Kodi Box’ Case Sees Man Pay Back Just £1 to the State

Post Syndicated from Andy original https://torrentfreak.com/infamous-kodi-box-case-sees-man-pay-back-just-1-to-the-state-180507/

In 2015, Middlesbrough-based shopkeeper Brian ‘Tomo’ Thompson shot into the headlines after being raided by police and Trading Standards in the UK.

Thompson had been selling “fully-loaded” piracy-configured Kodi boxes from his shop but didn’t think he’d done anything wrong.

“All I want to know is whether I am doing anything illegal. I know it’s a gray area but I want it in black and white,” he said.

Thompson started out with a particularly brave tone. He insisted he’d take the case to Crown Court and even to the European Court. His mission was show what was legal and what wasn’t, he said.

Very quickly, Thompson’s case took on great importance, with observers everywhere reporting on a potential David versus Goliath copyright battle for the ages. But Thompson’s case wasn’t straightforward.

The shopkeeper wasn’t charged with basic “making available” under the Copyrights, Designs and Patents Acts that would have found him guilty under the earlier BREIN v Filmspeler case. Instead, he stood accused of two offenses under section 296ZB of the Copyright, Designs and Patents Act, which deals with devices and services designed to “circumvent technological measures”.

In the end it was all moot. After entering his official ‘not guilty’ plea, last year Thompson suddenly changed his tune. He accepted the prosecution’s version of events, throwing himself at the mercy of the court with a guilty plea.

In October 2017, Teeside Crown Court heard that Thompson cost Sky around £200,000 in lost subscriptions while the shopkeeper made around £38,500 from selling the devices. But despite the fairly big numbers, Judge Peter Armstrong decided to go reasonably light on the 55-year-old, handing him an 18-month prison term, suspended for two years.

“I’ve come to the conclusion that in all the circumstances an immediate custodial sentence is not called for. But as a warning to others in future, they may not be so lucky,” the Judge said.

But things wouldn’t end there for Thompson.

In the UK, people who make money or obtain assets from criminal activity can be forced to pay back their profits, which are then confiscated by the state under the Proceeds of Crime Act (pdf). Almost anything can be taken, from straight cash to cars, jewellery and houses.

However, it appears that whatever cash Thompson earned from Kodi Box activities has long since gone.

During a Proceeds of Crime hearing reported on by Gazette Live, the Court heard that Thompson has no assets whatsoever so any confiscation order would have to be a small one.

In the end, Judge Simon Hickey decided that Thompson should forfeit a single pound, an amount that could increase if the businessman got lucky moving forward.

“If anything changes in the future, for instance if you win the lottery, it might come back,” the Judge said.

With that seeming particularly unlikely, perhaps this will be the end for Thompson. Considering the gravity and importance placed on his case, zero jail time and just a £1 to pay back will probably be acceptable to the 55-year-old and also a lesson to the authorities, who have gotten very little out of this expensive case.

Who knows, perhaps they might sum up the outcome using the same eight-letter word that Thompson can be seen half-covering in this photograph.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN reviews, discounts, offers and coupons.

Men Who Sold Pirate IPTV Service to Pubs Jailed for 4.5 Years

Post Syndicated from Andy original https://torrentfreak.com/men-who-sold-pirate-iptv-service-to-pubs-jailed-for-4-5-years-180404/

For owners and landlords of pubs and clubs in the UK, providing top-tier sports on TV can be the key to bringing in plenty of thirsty customers.

That being said, the costs of doing so is viewed by many as extortionate, with companies including Sky and BT Sport demanding huge fees for the privilege.

As a result, there is a growing opportunity for people to step in to provide cheaper alternatives. With satellite-type piracy now on the wane, IPTV is now a rising force and there’s no shortage of companies prepared to sell a device and associated subscription service to a landlord for the fraction of Sky’s fees.

That’s where John Dodds, 65, and Jason Richards, 45, stepped in. From 2009 until 2016, the pair were involved in an operation selling such services to a staggering 270 pubs and clubs in the North-East of England.

While Sky could charge thousands per month, the duo allegedly charged customers less than £200 per month. For this fee, they received a set-top box plus a service, which included Premier League soccer and otherwise PPV boxing matches.

According to local sources, the scheme was incredibly lucrative for the pair. Via a fraudulent company, the duo generated revenues of £1.5m, which provided luxury cars and foreign homes.

Unfortunately, however, the business – which at some point was branded ‘Full Effects HD Sports’ – attracted the attention of the Premier League. In common with the movie industry before them, they carried out a private prosecution on the basis the pair were defrauding the organization.

“What the defendants created was their own, highly professional broadcasting service which was being sold to subscribers at a rate designed to undercut any legitimate broadcaster, which they were able to do as they weren’t paying to make any of the programmes or buy from the owners, such as the Premier League,” Prosecutor David Groome told the court.

The court was convinced by the Premier League’s arguments and this morning, before Newcastle Crown Court, the pair were sentenced to four-and-a-half years each in prison.

“This was a sophisticated fraud committed against numerous broadcasters throughout the world and those who have interests in the contents of broadcasts, particularly the Football Association, Premier League,” the judge said, as quoted by Sunderland Echo.

“You both knew perfectly well you were engaged in fraud because you knew the broadcasters were not being paid any or any appropriate fee for the use of their broadcasts. You were able to mislead customers, tell them that the services were lawful for them to use when you knew they were not.”

Unfortunately for the duo’s customers, a number of publicans who bought the service were also sued or prosecuted, which the judge noted could have negative consequences in relation to their future suitability to hold a liquor license.

“This is a hugely significant judgment as it provides further evidence that selling these devices is illegal and can result in a prison sentence,” said Premier League director of legal services Kevin Plumb.

“We hope this verdict gets the message out that selling or using these devices is simply not worth the risk.”

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN reviews, discounts, offers and coupons.

Major Pirate Site Operators’ Sentences Increased on Appeal

Post Syndicated from Andy original https://torrentfreak.com/major-pirate-site-operators-sentences-increased-on-appeal-180330/

With The Pirate Bay the most famous pirate site in Swedish history still in full swing, a lesser known streaming platform started to gain traction more than half a decade ago.

From humble beginnings, Swefilmer eventually grew to become Sweden’s most popular movie and TV show streaming site. At one stage it was credited alongside another streaming portal for serving up to 25% of all online video streaming in Sweden.

But in 2015, everything came crashing down. An operator of the site in his early twenties was raided by local police and arrested. An older Turkish man, who was accused of receiving donations from users and setting up Swefilmer’s deals with advertisers, was later arrested in Germany.

Their activities between November 2013 and June 2015 landed them an appearance before the Varberg District Court last January, where they were accused of making more than $1.5m in advertising revenue from copyright infringement.

The prosecutor described the site as being like “organized crime”. The then 26-year-old was described as the main player behind the site, with the then 23-year-old playing a much smaller role. The latter received an estimated $4,000 of the proceeds, the former was said to have pocketed more than $1.5m.

As expected, things didn’t go well. The older man, who was described as leading a luxury lifestyle, was convicted of 1,044 breaches of copyright law and serious money laundering offenses. He was sentenced to three years in prison and ordered to forfeit 14,000,000 SEK (US$1.68m).

Due to his minimal role, the younger man was given probation and ordered to complete 120 hours of community service. Speaking with TorrentFreak at the time, the 23-year-old said he was relieved at the relatively light sentence but noted it may not be over yet.

Indeed, as is often the case with these complex copyright prosecutions, the matter found itself at the Court of Appeal of Western Sweden. On Wednesday its decision was handed down and it’s bad news for both men.

“The Court of Appeal, like the District Court, judges the men for breach of copyright law,” the Court said in a statement.

“They are judged to have made more than 1,400 copyrighted films available through the Swefilmer streaming service, without obtaining permission from copyright holders. One of the men is also convicted of gross money laundering because he received revenues from the criminal activity.”

In respect of the now 27-year-old, the Court decided to hand down a much more severe sentence, extending the term of imprisonment from three to four years.

There was some better news in respect of the amount he has to forfeit to the state, however. The District Court set this amount at 14,000,000 SEK (US$1.68m) but the Court of Appeal reduced it to ‘just’ 4,000,000 SEK (US$482,280).

The younger man’s conditional sentence was upheld but community service was replaced with a fine of 10,000 SEK (US$1,200). Also, along with his accomplice, he must now pay significant damages to a Norwegian plaintiff in the case.

“Both men will jointly pay damages of NOK 2.2 million (US$283,000) together with interest to Nordisk Film A / S for copyright infringement in one of the films posted on the website,” the Court writes in its decision.

But even now, the matter may not be closed. Ansgar Firsching, the older man’s lawyer, told SVT that the case could go all the way to the Supreme Court.

“I have informed my client about the content of the judgment and it is highly likely that he will turn to the Supreme Court,” Firsching said.

It appears that the 27-year-old will argue that at the time of the alleged offenses, merely linking to copyrighted content was not a criminal offense but whether this approach will succeed is seriously up for debate.

While linking was previously considered by some to sit in a legal gray area, the District Court drew heavily on the GS Media ruling handed down by the European Court of Justice in September 2016.

In that case, the EU Court found that those who post links to content they do not know is infringing in a non-commercial environment usually don’t commit infringement. The Swefilmer case doesn’t immediately appear to fit either of those parameters.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN reviews, discounts, offers and coupons.

Owner of ShareBeast and AlbumJams Sentenced To Five Years in Prison

Post Syndicated from Andy original https://torrentfreak.com/owner-of-sharebeast-and-albumjams-sentenced-to-five-years-in-prison-180323/

According to the RIAA, ShareBeast.com and AlbumJams.com were responsible for the illegal distribution of “a massive library” of popular albums and tracks.

With a nod to the sensitivity of pre-release piracy, the sites were blamed for offering “thousands of songs” that hadn’t yet reached their official release dates. In September 2015, U.S. authorities shut them down, placing seizure notices on both domains.

The RIAA claimed that ShareBeast was the largest illegal file-sharing site operating in the United States, noting that the site’s IP addresses at the time indicated that at least some hosting had taken place in Illinois.

“Millions of users accessed songs from ShareBeast each month without one penny of compensation going to countless artists, songwriters, labels and others who created the music,” RIAA Chairman & CEO Cary Sherman commented at the time.

Two years later in September 2017, then 29-year-old former ShareBeast operator Artur Sargsyan pleaded guilty to one felony count of criminal copyright infringement, admitting to the unauthorized distribution and reproduction of over one billion copies of copyrighted works.

“Through Sharebeast and other related sites, this defendant profited by illegally distributing copyrighted music and albums on a massive scale,” said U. S. Attorney John Horn.

“The collective work of the FBI and our international law enforcement partners have shut down the Sharebeast websites and prevented further economic losses by scores of musicians and artists.”

The Department of Justice reported that from 2012 to 2015, Sargsyan used ShareBeast as a pirate music repository, illegally hosting music by Ariana Grande, Katy Perry, Beyonce, Kanye West, and Justin Bieber, among others. Sargsyan linked to that content from Newjams.net and Albumjams.com, and granted access to the public.

If Sargsyan had responded to takedown notices more positively, it’s possible that things may have progressed in a different direction. The RIAA sent the site more than 100 copyright-infringement emails over a three-year period but to no effect.

This led the music industry group to get out its calculator and inform the DoJ that the total monetary loss to its member companies was “a conservative” $6.3 billion “gut-punch” to music creators who were paid nothing by the service.

Given the huge numbers involved, it’s likely that Sargsyan hoped his 2017 guilty plea would result in a more forgiving sentence. Yesterday, however, the full weight of the law came crashing down.

California resident Artur Sargsyan was sentenced by U.S. District Judge Timothy C. Batten, Sr., to five years in prison, followed by three years of supervised release. The now 30-year-old was also ordered to pay $458,200 restitution and ordered to forfeit $184,768.87.

“Sargsyan operated one of the most successful illegal music sharing websites on the Internet,” said U.S. Attorney Byung J. “BJay” Pak.

“His reproduction of copyrighted musical works were made available only to generate undeserved profits for himself. The incredible work done by our law enforcement partners and prosecutors in light of the complexity of Sargsyan’s operation demonstrates that we will employ all of our resources to stop this kind of theft.”

David J. LaValley, Special Agent in Charge of FBI Atlanta, said that Sargsyan was warned several times that he was violating the law by illegally sharing copyrighted works, but chose to ignore the warnings.

“His sentence sends a message that no matter how complex the operation, the FBI, its federal partners and law enforcement partners around the globe will go to every length to protect the property of hard working artists and the companies that produce their art,” LaValley said.

Given the music group’s lengthy statements on the Sharebeast topic in the past, thus far the RIAA has been relatively brief. Welcoming news of the sentencing via Twitter, the major labels’ figurehead congratulated the law enforcement bodies behind the successful prosecution.

“Congrats to U.S. Attorney BJay Pak + his team along with @TheJusticeDept CCIPS Division and @FBIAtlanta for their leadership on this important case,” the RIAA wrote.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN reviews, discounts, offers and coupons.

Founder of Fan-Made Subtitle Site Lose Copyright Infringement Appeal

Post Syndicated from Andy original https://torrentfreak.com/founder-of-fan-made-subtitle-site-lose-copyright-infringement-appeal-180318/

For millions of people around the world, subtitles are the only way to enjoy media in languages other than that in the original production. For the deaf and hard of hearing, they are absolutely essential.

Movie and TV show companies tend to be quiet good at providing subtitles eventually but in line with other restrictive practices associated with their industry, it can often mean a long wait for the consumer, particularly in overseas territories.

For this reason, fan-made subtitles have become somewhat of a cottage industry in recent years. Where companies fail to provide subtitles quickly enough, fans step in and create them by hand. This has led to the rise of a number of subtitling platforms, including the now widely recognized Undertexter.se in Sweden.

The platform had its roots back in 2003 but first hit the headlines in 2013 when Swedish police caused an uproar by raiding the site and seizing its servers.

“The people who work on the site don’t consider their own interpretation of dialog to be something illegal, especially when we’re handing out these interpretations for free,” site founder Eugen Archy said at the time.

Vowing to never give up in the face of pressure from the authorities, anti-piracy outfit Rättighetsalliansen (Rights Alliance), and companies including Nordisk Film, Paramount, Universal, Sony and Warner, Archy said that the battle over what began as a high school project would continue.

“No Hollywood, you played the wrong card here. We will never give up, we live in a free country and Swedish people have every right to publish their own interpretations of a movie or TV show,” he said.

It took four more years but in 2017 the Undertexter founder was prosecuted for distributing copyright-infringing subtitles while facing a potential prison sentence.

Things didn’t go well and last September the Attunda District Court found him guilty and sentenced the then 32-year-old operator to probation. In addition, he was told to pay 217,000 Swedish krona ($26,400) to be taken from advertising and donation revenues collected through the site.

Eugen Archy took the case to appeal, arguing that the Svea Hovrätt (Svea Court of Appeal) should acquit him of all the charges and dismiss or at least reduce the amount he was ordered to pay by the lower court. Needless to say, this was challenged by the prosecution.

On appeal, Archy agreed that he was the person behind Undertexter but disputed that the subtitle files uploaded to his site infringed on the plaintiffs’ copyrights, arguing they were creative works in their own right.

While to an extent that may have been the case, the Court found that the translations themselves depended on the rights connected to the original work, which were entirely held by the relevant copyright holders. While paraphrasing and parody might be allowed, pure translations are completely covered by the rights in the original and cannot be seen as new and independent works, the Court found.

The Svea Hovrätt also found that Archy acted intentionally, noting that in addition to administering the site and doing some translating work himself, it was “inconceivable” that he did not know that the subtitles made available related to copyrighted dialog found in movies.

In conclusion, the Court of Appeal upheld Archy’s copyright infringement conviction (pdf, Swedish) and sentenced him to probation, as previously determined by the Attunda District Court.

Last year, the legal status of user-created subtitles was also tested in the Netherlands. In response to local anti-piracy outfit BREIN forcing several subtitling groups into retreat, a group of fansubbers decided to fight back.

After raising their own funds, in 2016 the “Free Subtitles Foundation” (Stichting Laat Ondertitels Vrij – SLOV) took the decision to sue BREIN with the hope of obtaining a favorable legal ruling.

In 2017 it all fell apart when the Amsterdam District Court handed down its decision and sided with BREIN on each count.

The Court found that subtitles can only be created and distributed after permission has been obtained from copyright holders. Doing so outside these parameters amounts to copyright infringement.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN reviews, discounts, offers and coupons.

Pirate Site Admins Receive Suspended Sentences, Still Face €60m Damages Claim

Post Syndicated from Andy original https://torrentfreak.com/pirate-site-admins-receive-suspended-sentences-still-face-e60m-damages-claim-180313/

After being founded in 2009, French site Liberty Land (LL) made its home in Canada. At the time listed among France’s top 200 sites, Liberty Land carried an estimated 30,000 links to a broad range of unlicensed content.

Like many other indexes of its type, LL carried no content itself but hosted links to content hosted elsewhere, on sites like Megaupload and Rapidshare, for example. This didn’t save the operation from an investigation carried out by rightsholder groups SACEM and ALPA, which filed a complaint against Liberty Land with the French authorities in 2010.

Liberty Land

In May 2011 and alongside complaints from police that the people behind Liberty Land had taken extreme measures to hide themselves away, authorities arrested several men linked to the site in Marseille, near Le Havre, and in the Paris suburb of Montreuil.

Despite the men facing a possible five years in jail and fines of up to $700,000, the inquiry dragged on for nearly seven years. The trial of its alleged operators, now aged between 29 and 36-years-old, finally went ahead January 30 in Rennes.

The men faced charges that they unlawfully helped to distribute movies, TV series, games, software, music albums and e-books without permission from rightsholders. In court, one defended the site as being just like Google.

“For me, we had the same role as Google,” he said. “We were an SEO site. There is a difference between what we were doing and the distribution of pirated copies on the street.”

According to the prosecution, the site made considerable revenues from advertising, estimated at more than 300,000 euros between January 2009 and May 2011. The site’s two main administrators reportedly established an offshore company in the British Virgin Islands and a bank account in Latvia where they deposited between 100,000 and 150,000 euros each.

The prosecutor demanded fines for the former site admins and sentences of between six and 12 months in prison. Last week the Rennes Criminal Court rendered its decision, sentencing the four men to suspended sentences of between two and three months. More than 176,000 euros generated by the site was also confiscated by the Court.

While the men will no doubt be relieved that this extremely long case has reached a conclusion of sorts, it’s not over yet. 20minutes reports that the claims for damages filed by copyright groups including SACEM won’t be decided until September and they are significant, totaling 60 million euros.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN discounts, offers and coupons

What John Oliver gets wrong about Bitcoin

Post Syndicated from Robert Graham original http://blog.erratasec.com/2018/03/what-john-oliver-gets-wrong-about.html

John Oliver covered bitcoin/cryptocurrencies last night. I thought I’d describe a bunch of things he gets wrong.

How Bitcoin works

Nowhere in the show does it describe what Bitcoin is and how it works.
Discussions should always start with Satoshi Nakamoto’s original paper. The thing Satoshi points out is that there is an important cost to normal transactions, namely, the entire legal system designed to protect you against fraud, such as the way you can reverse the transactions on your credit card if it gets stolen. The point of Bitcoin is that there is no way to reverse a charge. A transaction is done via cryptography: to transfer money to me, you decrypt it with your secret key and encrypt it with mine, handing ownership over to me with no third party involved that can reverse the transaction, and essentially no overhead.
All the rest of the stuff, like the decentralized blockchain and mining, is all about making that work.
Bitcoin crazies forget about the original genesis of Bitcoin. For example, they talk about adding features to stop fraud, reversing transactions, and having a central authority that manages that. This misses the point, because the existing electronic banking system already does that, and does a better job at it than cryptocurrencies ever can. If you want to mock cryptocurrencies, talk about the “DAO”, which did exactly that — and collapsed in a big fraudulent scheme where insiders made money and outsiders didn’t.
Sticking to Satoshi’s original ideas are a lot better than trying to repeat how the crazy fringe activists define Bitcoin.

How does any money have value?

Oliver’s answer is currencies have value because people agree that they have value, like how they agree a Beanie Baby is worth $15,000.
This is wrong. A better way of asking the question why the value of money changes. The dollar has been losing roughly 2% of its value each year for decades. This is called “inflation”, as the dollar loses value, it takes more dollars to buy things, which means the price of things (in dollars) goes up, and employers have to pay us more dollars so that we can buy the same amount of things.
The reason the value of the dollar changes is largely because the Federal Reserve manages the supply of dollars, using the same law of Supply and Demand. As you know, if a supply decreases (like oil), then the price goes up, or if the supply of something increases, the price goes down. The Fed manages money the same way: when prices rise (the dollar is worth less), the Fed reduces the supply of dollars, causing it to be worth more. Conversely, if prices fall (or don’t rise fast enough), the Fed increases supply, so that the dollar is worth less.
The reason money follows the law of Supply and Demand is because people use money, they consume it like they do other goods and services, like gasoline, tax preparation, food, dance lessons, and so forth. It’s not like a fine art painting, a stamp collection or a Beanie Baby — money is a product. It’s just that people have a hard time thinking of it as a consumer product since, in their experience, money is what they use to buy consumer products. But it’s a symmetric operation: when you buy gasoline with dollars, you are actually selling dollars in exchange for gasoline. That you call one side in this transaction “money” and the other “goods” is purely arbitrary, you call gasoline money and dollars the good that is being bought and sold for gasoline.
The reason dollars is a product is because trying to use gasoline as money is a pain in the neck. Storing it and exchanging it is difficult. Goods like this do become money, such as famously how prisons often use cigarettes as a medium of exchange, even for non-smokers, but it has to be a good that is fungible, storable, and easily exchanged. Dollars are the most fungible, the most storable, and the easiest exchanged, so has the most value as “money”. Sure, the mechanic can fix the farmers car for three chickens instead, but most of the time, both parties in the transaction would rather exchange the same value using dollars than chickens.
So the value of dollars is not like the value of Beanie Babies, which people might buy for $15,000, which changes purely on the whims of investors. Instead, a dollar is like gasoline, which obey the law of Supply and Demand.
This brings us back to the question of where Bitcoin gets its value. While Bitcoin is indeed used like dollars to buy things, that’s only a tiny use of the currency, so therefore it’s value isn’t determined by Supply and Demand. Instead, the value of Bitcoin is a lot like Beanie Babies, obeying the laws of investments. So in this respect, Oliver is right about where the value of Bitcoin comes, but wrong about where the value of dollars comes from.

Why Bitcoin conference didn’t take Bitcoin

John Oliver points out the irony of a Bitcoin conference that stopped accepting payments in Bitcoin for tickets.
The biggest reason for this is because Bitcoin has become so popular that transaction fees have gone up. Instead of being proof of failure, it’s proof of popularity. What John Oliver is saying is the old joke that nobody goes to that popular restaurant anymore because it’s too crowded and you can’t get a reservation.
Moreover, the point of Bitcoin is not to replace everyday currencies for everyday transactions. If you read Satoshi Nakamoto’s whitepaper, it’s only goal is to replace certain types of transactions, like purely electronic transactions where electronic goods and services are being exchanged. Where real-life goods/services are being exchanged, existing currencies work just fine. It’s only the crazy activists who claim Bitcoin will eventually replace real world currencies — the saner people see it co-existing with real-world currencies, each with a different value to consumers.

Turning a McNugget back into a chicken

John Oliver uses the metaphor of turning a that while you can process a chicken into McNuggets, you can’t reverse the process. It’s a funny metaphor.
But it’s not clear what the heck this metaphor is trying explain. That’s not a metaphor for the blockchain, but a metaphor for a “cryptographic hash”, where each block is a chicken, and the McNugget is the signature for the block (well, the block plus the signature of the last block, forming a chain).
Even then that metaphor as problems. The McNugget produced from each chicken must be unique to that chicken, for the metaphor to accurately describe a cryptographic hash. You can therefore identify the original chicken simply by looking at the McNugget. A slight change in the original chicken, like losing a feather, results in a completely different McNugget. Thus, nuggets can be used to tell if the original chicken has changed.
This then leads to the key property of the blockchain, it is unalterable. You can’t go back and change any of the blocks of data, because the fingerprints, the nuggets, will also change, and break the nugget chain.
The point is that while John Oliver is laughing at a silly metaphor to explain the blockchain becuase he totally misses the point of the metaphor.
Oliver rightly says “don’t worry if you don’t understand it — most people don’t”, but that includes the big companies that John Oliver name. Some companies do get it, and are producing reasonable things (like JP Morgan, by all accounts), but some don’t. IBM and other big consultancies are charging companies millions of dollars to consult with them on block chain products where nobody involved, the customer or the consultancy, actually understand any of it. That doesn’t stop them from happily charging customers on one side and happily spending money on the other.
Thus, rather than Oliver explaining the problem, he’s just being part of the problem. His explanation of blockchain left you dumber than before.

ICO’s

John Oliver mocks the Brave ICO ($35 million in 30 seconds), claiming it’s all driven by YouTube personalities and people who aren’t looking at the fundamentals.
And while this is true, most ICOs are bunk, the  Brave ICO actually had a business model behind it. Brave is a Chrome-like web-browser whose distinguishing feature is that it protects your privacy from advertisers. If you don’t use Brave or a browser with an ad block extension, you have no idea how bad things are for you. However, this presents a problem for websites that fund themselves via advertisements, which is most of them, because visitors no longer see ads. Brave has a fix for this. Most people wouldn’t mind supporting the websites they visit often, like the New York Times. That’s where the Brave ICO “token” comes in: it’s not simply stock in Brave, but a token for micropayments to websites. Users buy tokens, then use them for micropayments to websites like New York Times. The New York Times then sells the tokens back to the market for dollars. The buying and selling of tokens happens without a centralized middleman.
This is still all speculative, of course, and it remains to be seen how successful Brave will be, but it’s a serious effort. It has well respected VC behind the company, a well-respected founder (despite the fact he invented JavaScript), and well-respected employees. It’s not a scam, it’s a legitimate venture.

How to you make money from Bitcoin?

The last part of the show is dedicated to describing all the scam out there, advising people to be careful, and to be “responsible”. This is garbage.
It’s like my simple two step process to making lots of money via Bitcoin: (1) buy when the price is low, and (2) sell when the price is high. My advice is correct, of course, but useless. Same as “be careful” and “invest responsibly”.
The truth about investing in cryptocurrencies is “don’t”. The only responsible way to invest is to buy low-overhead market index funds and hold for retirement. No, you won’t get super rich doing this, but anything other than this is irresponsible gambling.
It’s a hard lesson to learn, because everyone is telling you the opposite. The entire channel CNBC is devoted to day traders, who buy and sell stocks at a high rate based on the same principle as a ponzi scheme, basing their judgment not on the fundamentals (like long term dividends) but animal spirits of whatever stock is hot or cold at the moment. This is the same reason people buy or sell Bitcoin, not because they can describe the fundamental value, but because they believe in a bigger fool down the road who will buy it for even more.
For things like Bitcoin, the trick to making money is to have bought it over 7 years ago when it was essentially worthless, except to nerds who were into that sort of thing. It’s the same tick to making a lot of money in Magic: The Gathering trading cards, which nerds bought decades ago which are worth a ton of money now. Or, to have bought Apple stock back in 2009 when the iPhone was new, when nerds could understand the potential of real Internet access and apps that Wall Street could not.
That was my strategy: be a nerd, who gets into things. I’ve made a good amount of money on all these things because as a nerd, I was into Magic: The Gathering, Bitcoin, and the iPhone before anybody else was, and bought in at the point where these things were essentially valueless.
At this point with cryptocurrencies, with the non-nerds now flooding the market, there little chance of making it rich. The lottery is probably a better bet. Instead, if you want to make money, become a nerd, obsess about a thing, understand a thing when its new, and cash out once the rest of the market figures it out. That might be Brave, for example, but buy into it because you’ve spent the last year studying the browser advertisement ecosystem, the market’s willingness to pay for content, and how their Basic Attention Token delivers value to websites — not because you want in on the ICO craze.

Conclusion

John Oliver spends 25 minutes explaining Bitcoin, Cryptocurrencies, and the Blockchain to you. Sure, it’s funny, but it leaves you worse off than when it started. It admits they “simplify” the explanation, but they simplified it so much to the point where they removed all useful information.

Hollywood Commissioned Tough Jail Sentences for Online Piracy, ISP Says

Post Syndicated from Andy original https://torrentfreak.com/hollywood-commissioned-tough-jail-sentences-for-online-piracy-isp-says-180227/

According to local prosecutors who have handled many copyright infringement cases over the past decade, Sweden is nowhere near tough enough on those who commit online infringement.

With this in mind, the government sought advice on how such crimes should be punished, not only more severely, but also in proportion to the damages alleged to have been caused by defendants’ activities.

The corresponding report was returned to Minister for Justice Heléne Fritzon earlier this month by Council of Justice member Dag Mattsson. The paper proposed a new tier of offenses that should receive special punishment when there are convictions for large-scale copyright infringement and “serious” trademark infringement.

Partitioning the offenses into two broad categories, the report envisions those found guilty of copyright infringement or trademark infringement “of a normal grade” may be sentenced to fines or imprisonment up to a maximum of two years. For those at the other end of the scale, engaged in “cases of gross crimes”, the penalty sought is a minimum of six months in prison and not more than six years.

The proposals have been criticized by those who feel that copyright infringement shouldn’t be put on a par with more serious and even potentially violent crimes. On the other hand, tools to deter larger instances of infringement have been welcomed by entertainment industry groups, who have long sought more robust sentencing options in order to protect their interests.

In the middle, however, are Internet service providers such as Bahnhof, who are often dragged into the online piracy debate due to the allegedly infringing actions of some of their customers. In a statement on the new proposals, the company is clear on why Sweden is preparing to take such a tough stance against infringement.

“It’s not a daring guess that media companies are asking for Sweden to tighten the penalty for illegal file sharing and streaming,” says Bahnhof lawyer Wilhelm Dahlborn.

“It would have been better if the need for legislative change had taken place at EU level and co-ordinated with other similar intellectual property legislation.”

Bahnhof chief Jon Karlung, who is never afraid to speak his mind on such matters, goes a step further. He believes the initiative amounts to a gift to the United States.

“It’s nothing but a commission from the American film industry,” Karlung says.

“I do not mind them going for their goals in court and trying to protect their interests, but it does not mean that the state, the police, and ultimately taxpayers should put mass resources on it.”

Bahnhof notes that the proposals for the toughest extended jail sentences aren’t directly aimed at petty file-sharers. However, the introduction of a new offense of “gross crime” means that the limitation period shifts from the current five years to ten.

It also means that due to the expansion of prison terms beyond two years, secret monitoring of communications (known as HÖK) could come into play.

“If the police have access to HÖK, it can be used to get information about which individuals are file sharing,” warns Bahnhof lawyer Wilhelm Dahlborn.

“One can also imagine a scenario where media companies increasingly report crime as gross in order to get the police to do the investigative work they have previously done. Harder punishments to tackle file-sharing also appear very old-fashioned and equally ineffective.”

As noted in our earlier report, the new proposals also include measures that would enable the state to confiscate all kinds of property, both physical items and more intangible assets such as domain names. Bahnhof also takes issue with this, noting that domains are not the problem here.

“In our opinion, it is not the domain name which is the problem, it is the content of the website that the domain name points to,” the company says.

“Moreover, confiscation of a domain name may conflict with constitutional rules on freedom of expression in a way that is very unfortunate. The issues of freedom of expression and why copyright infringement is to be treated differently haven’t been addressed much in the investigation.”

Under the new proposals, damage to rightsholders and monetary gain by the defendant would also be taken into account when assessing whether a crime is “gross” or not. This raises questions as to what extent someone could be held liable for piracy when a rightsholder maintains damage was caused yet no profit was generated.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN discounts, offers and coupons

Pirate Site Operators’ Jail Sentences Overturned By Court of Appeal

Post Syndicated from Andy original https://torrentfreak.com/pirate-site-operators-jail-sentences-overturned-by-court-of-appeal-180226/

With The Pirate Bay proving to be somewhat of an elusive and irritating target, in 2014 police took on a site capturing an increasing portion of the Swedish pirate market.

Unlike The Pirate Bay which uses torrents, Dreamfilm was a portal for streaming content and it quickly grew alongside the now-defunct Swefilmer to dominate the local illicit in-browser viewing sector. But after impressive growth, things came to a sudden halt.

In January 2015, Dreamfilm announced that the site would be shut down after one of its administrators was detained by the authorities and interrogated. A month later, several more Sweden-based sites went down including the country’s second largest torrent site Tankefetast, torrent site PirateHub, and streaming portal Tankefetast Play (TFPlay).

Anti-piracy group Rights Alliance described the four-site networks as one of “Europe’s leading players for illegal file sharing and streaming.”

Image published by Dreamfilm after the raiddreamfilm

After admitting they’d been involved in the sites but insisting they’d committed no crimes, last year four men aged between 21 and 31-years-old appeared in court charged with copyright infringement. It didn’t go well.

The Linköping District Court found them guilty and decided they should all go to prison, with the then 23-year-old founder receiving the harshest sentence of 10 months, a member of the Pirate Party who reportedly handled advertising receiving 8 months, and two others getting six months each. On top, they were ordered to pay damages of SEK 1,000,000 ($122,330) to film industry plaintiffs.

Like many similar cases in Sweden, the case went to appeal and late last week the court handed down its decision which amends the earlier decision in several ways.

Firstly, the Hovrätten (Court of Appeals) agreed that with the District Court’s ruling that the defendants had used dreamfilm.se, tfplay.org, tankafetast.com and piratehub.net as platforms to deliver movies stored on Russian servers to the public.

One defendant owned the domains, another worked as a site supervisor, while the other pair worked as a programmer and in server acquisition, the Court said.

Dagens Juridik reports that the defendants argued that the websites were not a prerequisite for people to access the films, and therefore they had not been made available to a new market.

However, the Court of Appeal agreed with the District Court’s assessment that the links meant that the movies had been made available to a “new audience”, which under EU law means that a copyright infringement had been committed. As far as the samples presented in the case would allow, the men were found to have committed between 45 and 118 breaches of copyright law.

The Court also found that the website operation had a clear financial motive, delivering movies to the public for free while earning money from advertising.

While agreeing with the District Court on most points, the Court of Appeals decided to boost the damages award from SEK 1,000,000 ($122,330) to SEK 4,250,000 ($519,902). However, there was much better news in respect of the prison sentences.

Taking into consideration the young age of the men (who before this case had no criminal records) and the unlikely event that they would offend again, the Court decided that none would have to go to prison as previously determined.

Instead, all of the men were handed conditional sentences with two ordered to pay daily fines, which are penalties based on the offender’s daily personal income.

Last week it was reported that Sweden is preparing to take a tougher line with large-scale online copyright infringers. Proposals currently with the government foresee a new crime of “gross infringement” under both copyright and trademark law, which could lead to sentences of up to six years in prison.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN discounts, offers and coupons

TVAddons Suffers Big Setback as Court Completely Overturns Earlier Ruling

Post Syndicated from Andy original https://torrentfreak.com/tvaddons-suffers-big-setback-as-court-completely-overturns-earlier-ruling-180221/

On June 2, 2017 a group of Canadian telecoms giants including Bell Canada, Bell ExpressVu, Bell Media, Videotron, Groupe TVA, Rogers Communications and Rogers Media, filed a complaint in Federal Court against Montreal resident, Adam Lackman.

Better known as the man behind Kodi addon repository TVAddons, Lackman was painted as a serial infringer in the complaint. The telecoms companies said that, without gaining permission from rightsholders, Lackman communicated copyrighted TV shows including Game of Thrones, Prison Break, The Big Bang Theory, America’s Got Talent, Keeping Up With The Kardashians and dozens more, by developing, hosting, distributing and promoting infringing Kodi add-ons.

To limit the harm allegedly caused by TVAddons, the complaint demanded interim, interlocutory, and permanent injunctions restraining Lackman from developing, promoting or distributing any of the allegedly infringing add-ons or software. On top, the plaintiffs requested punitive and exemplary damages, plus costs.

On June 9, 2017 the Federal Court handed down a time-limited interim injunction against Lackman ex parte, without Lackman being able to mount a defense. Bailiffs took control of TVAddons’ domains but the most controversial move was the granting of an Anton Piller order, a civil search warrant which granted the plaintiffs no-notice permission to enter Lackman’s premises to secure evidence before it could be tampered with.

The order was executed June 12, 2017, with Lackman’s home subjected to a lengthy search during which the Canadian was reportedly refused his right to remain silent. Non-cooperation with an Anton Piller order can amount to a contempt of court, he was told.

With the situation seemingly spinning out of Lackman’s control, unexpected support came from the Honourable B. Richard Bell during a subsequent June 29, 2017 Federal Court hearing to consider the execution of the Anton Piller order.

The Judge said that Lackman had been subjected to a search “without any of the protections normally afforded to litigants in such circumstances” and took exception to the fact that the plaintiffs had ordered Lackman to spill the beans on other individuals in the Kodi addon community. He described this as a hunt for further evidence, not the task of preserving evidence it should’ve been.

Justice Bell concluded by ruling that while the prima facie case against Lackman may have appeared strong before the judge who heard the matter ex parte, the subsequent adversarial hearing undermined it, to the point that it no longer met the threshold.

As a result of these failings, Judge Bell vacated the Anton Piller order and dismissed the application for interlocutory injunction.

While this was an early victory for Lackman and TVAddons, the plaintiffs took the decision to an appeal which was heard November 29, 2017. Determined by a three-judge panel and signed by Justice Yves de Montigny, the decision was handed down Tuesday and it effectively turns the earlier ruling upside down.

The appeal had two matters to consider: whether Justice Bell made errors when he vacated the Anton Piller order, and whether he made errors when he dismissed the application for an interlocutory injunction. In short, the panel found that he did.

In a 27-page ruling, the first key issue concerns Justice Bell’s understanding of the nature of both Lackman and TVAddons.

The telecoms companies complained that the Judge got it wrong when he characterized Lackman as a software developer who came up with add-ons that permit users to access material “that is for the most part not infringing on the rights” of the telecoms companies.

The companies also challenged the Judge’s finding that the infringing add-ons offered by the site represented “just over 1%” of all the add-ons developed by Lackman.

“I agree with the [telecoms companies] that the Judge misapprehended the evidence and made palpable and overriding errors in his assessment of the strength of the appellants’ case,” Justice Yves de Montigny writes in the ruling.

“Nowhere did the appellants actually state that only a tiny proportion of the add-ons found on the respondent’s website are infringing add-ons.”

The confusion appears to have arisen from the fact that while TVAddons offered 1,500 add-ons in total, the heavily discussed ‘featured’ addon category on the site contained just 22 add-ons, 16 of which were considered to be infringing according to the original complaint. So, it was 16 add-ons out of 22 being discussed, not 16 add-ons out of a possible 1,500.

“[Justice Bell] therefore clearly misapprehended the evidence in this regard by concluding that just over 1% of the add-ons were purportedly infringing,” the appeals Judge adds.

After gaining traction with Justice Bell in the previous hearing, Lackman’s assertion that his add-ons were akin to a “mini Google” was fiercely contested by the telecoms companies. They also fell flat before the appeal hearing.

Justice de Montigny says that Justice Bell “had been swayed” when Lackman’s expert replicated the discovery of infringing content using Google but had failed to grasp the important differences between a general search engine and a dedicated Kodi add-on.

“While Google is an indiscriminate search engine that returns results based on relevance, as determined by an algorithm, infringing add-ons target predetermined infringing content in a manner that is user-friendly and reliable,” the Judge writes.

“The fact that a search result using an add-on can be replicated with Google is of little consequence. The content will always be found using Google or any other Internet search engine because they search the entire universe of all publicly available information. Using addons, however, takes one to the infringing content much more directly, effortlessly and safely.”

With this in mind, Justice de Montigny says there is a “strong prima facie case” that Lackman, by hosting and distributing infringing add-ons, made the telecoms companies’ content available to the public “at a time of their choosing”, thereby infringing paragraph 2.4(1.1) and section 27 of the Copyright Act.

On TVAddons itself, the Judge said that the platform is “clearly designed” to facilitate access to infringing material since it targets “those who want to circumvent the legal means of watching television programs and the related costs.”

Turning to Lackman, the Judge said he could not claim to have no knowledge of the infringing content delivered by the add-ons distributed on this site, since they were purposefully curated prior to distribution.

“The respondent cannot credibly assert that his participation is content neutral and that he was not negligent in failing to investigate, since at a minimum he selects and organizes the add-ons that find their way onto his website,” the Judge notes.

In a further setback, the Judge draws clear parallels with another case before the Canadian courts involving pre-loaded ‘pirate’ set-top boxes. Justice de Montigny says that TVAddons itself bears “many similarities” with those devices that are already subjected to an interlocutory injunction in Canada.

“The service offered by the respondent through the TVAddons website is no different from the service offered through the set-top boxes. The means through which access is provided to infringing content is different (one relied on hardware while the other relied on a website), but they both provided unauthorized access to copyrighted material without authorization of the copyright owners,” the Judge finds.

Continuing, the Judge makes some pointed remarks concerning the execution of the Anton Piller order. In short, he found little wrong with the way things went ahead and also contradicted some of the claims and beliefs circulated in the earlier hearing.

Citing the affidavit of an independent solicitor who monitored the order’s execution, the Judge said that the order was explained to Lackman in plain language and he was informed of his right to remain silent. He was also told that he could refuse to answer questions other than those specified in the order.

The Judge said that Lackman was allowed to have counsel present, “with whom he consulted throughout the execution of the order.” There was nothing, the Judge said, that amounted to the “interrogation” alluded to in the earlier hearing.

Justice de Montigny also criticized Justice Bell for failing to take into account that Lackman “attempted to conceal crucial evidence and lied to the independent supervising solicitor regarding the whereabouts of that evidence.”

Much was previously made of Lackman apparently being forced to hand over personal details of third-parties associated directly or indirectly with TVAddons. The Judge clarifies what happened in his ruling.

“A list of names was put to the respondent by the plaintiffs’ solicitors, but it was apparently done to expedite the questioning process. In any event, the respondent did not provide material information on the majority of the aliases put to him,” the Judge reveals.

But while not handing over evidence on third-parties will paint Lackman in a better light with concerned elements of the add-on community, the Judge was quick to bring up the Canadian’s history and criticized Justice Bell for not taking it into account when he vacated the Anton Piller order.

“[T]he respondent admitted that he was involved in piracy of satellite television signals when he was younger, and there is evidence that he was involved in the configuration and sale of ‘jailbroken’ Apple TV set-top boxes,” Justice de Montigny writes.

“When juxtaposed to the respondent’s attempt to conceal relevant evidence during the execution of the Anton Piller order, that contextual evidence adds credence to the appellants’ concern that the evidence could disappear without a comprehensive order.”

Dismissing Justice Bell’s findings as “fatally flawed”, Justice de Montigny allowed the appeal of the telecoms companies, set aside the order of June 29, 2017, declared the Anton Piller order and interim injunctions legal, and granted an interlocutory injunction to remain valid until the conclusion of the case in Federal Court. The telecoms companies were also awarded costs of CAD$50,000.

It’s worth noting that despite all the detail provided up to now, the case hasn’t yet got to the stage where the Court has tested any of the claims put forward by the telecoms companies. Everything reported to date is pre-trial and has been taken at face value.

TorrentFreak spoke with Adam Lackman but since he hadn’t yet had the opportunity to discuss the matter with his lawyers, he declined to comment further on the record. There is a statement on the TVAddons website which gives his position on the story so far.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN discounts, offers and coupons

Pirate Site Admin Sentenced to Two Years Prison & €83.6 Million Damages

Post Syndicated from Andy original https://torrentfreak.com/pirate-site-admin-sentenced-to-two-years-prison-e83-6-million-damages-180221/

Way back in 2011, Streamiz was reported to be the second most popular pirate streaming site in France with around 250,000 visitors per day. The site didn’t host its own content but linked to movies elsewhere.

This prominent status soon attracted the attention of various entertainment companies including the National Federation of Film Distributors (FNDF) which filed a complaint against the site back in 2009.

Investigators eventually traced the presumed operator of the site to a location in the Hauts-de-Seine region of France. In October 2011 he was arrested leaving his Montrouge home in the southern Parisian suburbs. His backpack reportedly contained socks stuffed with almost 30,000 euros in cash.

The man was ordered to appear before the investigating judge but did not attend. He also failed to appear during his sentencing this Monday, which may or may not have been a good thing, depending on one’s perspective.

In his absence, the now 41-year-old was found guilty of copyright infringement offenses and handed one of the toughest sentences ever in a case of its type.

According to an AFP report, when the authorities can catch up with him the man must not only serve two years in prison but also pay a staggering 83.6 million euros in damages to Disney, 20th Century Fox, Warner Bros and SACEM, the Society of Authors, Composers and Music Publishers.

Streamiz is now closed but at its peak offered around 40,000 movies to millions of users per month. In total, the site stood accused of around 500,000,000 infringements, earning its operator an estimated 150,000 euros in advertising revenue over a two year period.

“This is a clear case of commercial counterfeiting” based on a “very structured” system, David El Sayegh, Secretary General of SACEM, told AFP. His sentence “sends a very clear message: there will be no impunity for pirates,” he added.

With an arrest warrant still outstanding, the former Streamiz admin is now on the run with very few options available to him. Certainly, the 83.6 million euro fine won’t ever be paid but the prison sentence is something he might need to get behind him.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN discounts, offers and coupons

Sweden Considers Six Years in Jail For Online Pirates

Post Syndicated from Andy original https://torrentfreak.com/sweden-considers-six-years-in-jail-for-online-pirates-180218/

Ever since the infamous Pirate Bay trial more than a decade ago, prosecutors in Sweden have called for a tougher approach to breaches of copyright law. In general terms, the country has been painted as soft on infringement but that could all be about to change.

After reaching the conclusion that penalties in Sweden “appear to be low” when compared to those on the international stage, the government sought advice on how such crimes can be punished, not only more severely, but also in proportion to the alleged damage caused.

In response, Minister for Justice Heléne Fritzon received a report this week. It proposes a new tier of offenses with “special” punishments to tackle large-scale copyright infringement and “serious” trademark infringement.

Presented by Council of Justice member Dag Mattsson, the report envisions new criminal designations and crime being divided into two levels of seriousness.

“A person who has been found guilty of copyright infringement or trademark infringement of a normal grade may be sentenced to fines or imprisonment up to a maximum of two years,” the government notes.

“In cases of gross crimes, a person may be convicted of gross copyright infringement or gross trademark infringement and sent to prison for at least six months and not more than six years.”

Last year the Supreme Court found that although prison sentences can be handed down in such cases, there were no legislative indications that copyright infringement should be penalized via a term of imprisonment.

For an idea of the level of change, one only need refer to The Pirate Bay case, which would undoubtedly be considered as “gross infringement” under the new proposals.

Under the new rules, defendants Peter Sunde, Fredrik Neij and Carl Lundström would be sentenced to a minimum of six months and a maximum of six years. As things stood, with infringement being dealt with via fines or up to two years’ imprisonment, they were sentenced to prison terms of eight, ten and four months respectively.

Under the new proposals, damage to rightsholders and monetary gain by the defendant would be taken into account when assessing whether a crime is “gross” or not. This raises the question of whether someone sharing a single pre-release movie could be deemed a gross infringer even if no money was made.

Also of interest are proposals that would enable the state to confiscate all kinds of property, both physical items and more intangible assets such as domain names. This proposal is a clear nod towards the Pirate Bay case which dragged on for several years before the state was able to take over its thepiratebay.se domain.

“Today there is organized online piracy that has major consequences for the whole community,” Minister Fritzon said in a statement.

“Therefore, it is good that the punishments for these crimes have been reviewed, as the sentence will then be proportional to the seriousness of the crime.”

The legislative amendments are proposed to enter into force on July 1, 2019.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and more. We also have VPN discounts, offers and coupons

Man Handed Conditional Prison Sentence for Spreading Popcorn Time Information

Post Syndicated from Andy original https://torrentfreak.com/man-handed-conditional-prison-sentence-spreading-popcorn-time-information-180208/

In August 2015, police in Denmark announced they had arrested a man in his thirties said to be the operator of a Popcorn Time-focused website. Popcorntime.dk was subsequently shut down and its domain placed under the control of the state prosecutor.

“The Danish State Prosecutor for Serious Economic and International Crime is presently conducting a criminal investigation that involves this domain name,” a seizure notice on the site reads.

“As part of the investigation the state prosecutor has requested a Danish District Court to transfer the rights of the domain name to the state prosecutor. The District Court has complied with the request.”

In a circumstance like this, it’s common to conclude that the site was offering copyright-infringing content or software. That wasn’t the case though, not even close.

PopcornTime.dk was an information resource, offering news on Popcorn Time-related developments, guides, plus tips on how to use the software while staying anonymous.

PopcornTime.dk as it appeared in 2015

Importantly, PopcornTime.dk hosted no software, preferring to link to other sites where the application could be downloaded instead. That didn’t prevent an aggressive prosecution though and now, two-and-half years later, the verdict’s in and it’s bound to raise more than a few eyebrows.

On Wednesday, a court in Odense, Denmark, handed the now 39-year-old man behind PopcornTime.dk a six-month conditional prison sentence for spreading information about the controversial movie streaming service.

Senior prosecutor Dorte Køhler Frandsen from SØIK (State Attorney for Special Economic and International Crime), who was behind the criminal proceedings, described the successful prosecution as a first-of-its-kind moment for the entire region.

“Never before has a person been convicted of helping to spread streaming services. The judgment is therefore an important step in combating illegal streaming on the Internet and will reverberate throughout Europe,” Frandsen said.

According to a statement from the prosecutor, the 39-year-old earned 506,003 Danish Krone ($83,363) in advertising revenue from his website in 2015. In addition to forfeiting this amount and having his domain confiscated, the man will also be required to complete 120 hours of community service.

“The verdict is a clear signal to those who spread illegal pirate services. The film industry and others lose billions in revenue each year because criminals illegally offer films for free. It’s a loss for everyone. Also the consumer,” Frandsen added.

The convicted man now has two weeks to decide whether he will take his appeal to the Østre Landsret, one of Denmark’s two High Courts.

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Jailed Streaming Site Operator Hit With Fresh $3m Damages Lawsuit

Post Syndicated from Andy original https://torrentfreak.com/jailed-streaming-site-operator-hit-with-fresh-3m-damages-lawsuit-180207/

After being founded more than half a decade ago, Swefilmer grew to become Sweden’s most popular movie and TV show streaming site. It was only a question of time before authorities stepped in to bring the show to an end.

In 2015, a Swedish operator of the site in his early twenties was raided by local police. A second man, Turkish and in his late twenties, was later arrested in Germany.

The pair, who hadn’t met in person, appeared before the Varberg District Court in January 2017, accused of making more than $1.5m from their activities between November 2013 and June 2015.

The prosecutor described Swefilmer as “organized crime”, painting the then 26-year-old as the main brains behind the site and the 23-year-old as playing a much smaller role. The former was said to have led a luxury lifestyle after benefiting from $1.5m in advertising revenue.

The sentences eventually handed down matched the defendants’ alleged level of participation. While the younger man received probation and community service, the Turk was sentenced to serve three years in prison and ordered to forfeit $1.59m.

Very quickly it became clear there would be an appeal, with plaintiffs represented by anti-piracy outfit RightsAlliance complaining that their 10m krona ($1.25m) claim for damages over the unlawful distribution of local movie Johan Falk: Kodnamn: Lisa had been ruled out by the Court.

With the appeal hearing now just a couple of weeks away, Swedish outlet Breakit is reporting that media giant Bonnier Broadcasting has launched an action of its own against the now 27-year-old former operator of Swefilmer.

According to the publication, Bonnier’s pay-TV company C More, which distributes for Fox, MGM, Paramount, Universal, Sony and Warner, is set to demand around 24m krona ($3.01m) via anti-piracy outfit RightsAlliance.

“This is about organized crime and grossly criminal individuals who earned huge sums on our and others’ content. We want to take every opportunity to take advantage of our rights,” says Johan Gustafsson, Head of Corporate Communications at Bonnier Broadcasting.

C More reportedly filed its lawsuit at the Stockholm District Court on January 30, 2018. At its core are four local movies said to have been uploaded and made available via Swefilmer.

“C More would probably never even have granted a license to [the operator] to make or allow others to make the films available to the public in a similar way as [the operator] did, but if that had happened, the fee would not be less than 5,000,000 krona ($628,350) per film or a total of 20,000,000 krona ($2,513,400),” C More’s claim reads.

Speaking with Breakit, lawyer Ansgar Firsching said he couldn’t say much about C More’s claims against his client.

“I am very surprised that two weeks before the main hearing [C More] comes in with this requirement. If you open another front, we have two trials that are partly about the same thing,” he said.

Firsching said he couldn’t elaborate at this stage but expects his client to deny the claim for damages. C More sees things differently.

“Many people live under the illusion that sites like Swefilmer are driven by idealistic teens in their parents’ basements, which is completely wrong. This is about organized crime where our content is used to generate millions and millions in revenue,” the company notes.

The appeal in the main case is set to go ahead February 20th.

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Pirate Streaming on Facebook is a Seriously Risky Business

Post Syndicated from Andy original https://torrentfreak.com/pirate-streaming-on-facebook-is-a-seriously-risky-business-180114/

For more than a year the British public has been warned about the supposed dangers of Kodi piracy.

Dozens of headlines have claimed consequences ranging from system-destroying malware to prison sentences. Fortunately, most of them can be filed under “tabloid nonsense.”

That being said, there is an extremely important issue that deserves much closer attention, particularly given a shift in the UK legal climate during 2017. We’re talking about live streaming copyrighted content on Facebook, which is both incredibly easy and frighteningly risky.

This week it was revealed that 34-year-old Craig Foster from the UK had been given an ultimatum from Sky to pay a £5,000 settlement fee. The media giant discovered that he’d live-streamed the Anthony Joshua v Wladimir Klitschko fight on Facebook and wanted compensation to make a potential court case disappear.

While it may seem initially odd to use the word, Foster was lucky.

Under last year’s Digital Economy Act, he could’ve been jailed for up to ten years for distributing copyright-infringing content to the public, if he had “reason to believe that communicating the work to the public [would] cause loss to the owner of the copyright, or [would] expose the owner of the copyright to a risk of loss.”

Clearly, as a purchaser of the £19.95 pay-per-view himself, he would’ve appreciated that the event costs money. With that in mind, a court would likely find that he would have been aware that Sky would have been exposed to a “risk of loss”. Sky claim that 4,250 people watched the stream but the way the law is written, no specific level of loss is required for a breach of the law.

But it’s not just the threat of a jail sentence that’s the problem. People streaming live sports on Facebook are sitting ducks.

In Foster’s case, the fight he streamed was watermarked, which means that Sky put a tracking code into it which identified him personally as the buyer of the event. When he (or his friend, as Foster claims) streamed it on Facebook, it was trivial for Sky to capture the watermark and track it back to his Sky account.

Equally, it would be simplicity itself to see that the name on the Sky account had exactly the same name and details as Foster’s Facebook account. So, to most observers, it would appear that not only had Foster purchased the event, but he was also streaming it to Facebook illegally.

It’s important to keep something else in mind. No cooperation between Sky and Facebook would’ve been necessary to obtain Foster’s details. Take the amount of information most people share on Facebook, combine that with the information Sky already had, and the company’s anti-piracy team would have had a very easy job.

Now compare this situation with an upload of the same stream to a torrent site.

While the video capture would still contain Foster’s watermark, which would indicate the source, to prove he also distributed the video Sky would’ve needed to get inside a torrent swarm. From there they would need to capture the IP address of the initial seeder and take the case to court, to force an ISP to hand over that person’s details.

Presuming they were the same person, Sky would have a case, with a broadly similar level of evidence to that presented in the current matter. However, it would’ve taken them months to get their man and cost large sums of money to get there. It’s very unlikely that £5,000 would cover the costs, meaning a much, much bigger bill for the culprit.

Or, confident that Foster was behind the leak based on the watermark alone, Sky could’ve gone straight to the police. That never ends well.

The bottom line is that while live-streaming on Facebook is simplicity itself, people who do it casually from their own account (especially with watermarked content) are asking for trouble.

Nailing Foster was the piracy equivalent of shooting fish in a barrel but the worrying part is that he probably never gave his (or his friend’s…) alleged infringement a second thought. With a click or two, the fight was live and he was staring down the barrel of a potential jail sentence, had Sky not gone the civil route.

It’s scary stuff and not enough is being done to warn people of the consequences. Forget the scare stories attempting to deter people from watching fights or movies on Kodi, thoughtlessly streaming them to the public on social media is the real danger.

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The deal with Bitcoin

Post Syndicated from Michal Zalewski original http://lcamtuf.blogspot.com/2017/12/the-deal-with-bitcoin.html

♪ Used to have a little now I have a lot
I’m still, I’m still Jenny from the block
          chain ♪

For all that has been written about Bitcoin and its ilk, it is curious that the focus is almost solely what the cryptocurrencies are supposed to be. Technologists wax lyrical about the potential for blockchains to change almost every aspect of our lives. Libertarians and paleoconservatives ache for the return to “sound money” that can’t be conjured up at the whim of a bureaucrat. Mainstream economists wag their fingers, proclaiming that a proper currency can’t be deflationary, that it must maintain a particular velocity, or that the government must be able to nip crises of confidence in the bud. And so on.

Much of this may be true, but the proponents of cryptocurrencies should recognize that an appeal to consequences is not a guarantee of good results. The critics, on the other hand, would be best served to remember that they are drawing far-reaching conclusions about the effects of modern monetary policies based on a very short and tumultuous period in history.

In this post, my goal is to ditch most of the dogma, talk a bit about the origins of money – and then see how “crypto” fits the bill.

1. The prehistory of currencies

The emergence of money is usually explained in a very straightforward way. You know the story: a farmer raised a pig, a cobbler made a shoe. The cobbler needed to feed his family while the farmer wanted to keep his feet warm – and so they met to exchange the goods on mutually beneficial terms. But as the tale goes, the barter system had a fatal flaw: sometimes, a farmer wanted a cooking pot, a potter wanted a knife, and a blacksmith wanted a pair of pants. To facilitate increasingly complex, multi-step exchanges without requiring dozens of people to meet face to face, we came up with an abstract way to represent value – a shiny coin guaranteed to be accepted by every tradesman.

It is a nice parable, but it probably isn’t very true. It seems far more plausible that early societies relied on the concept of debt long before the advent of currencies: an informal tally or a formal ledger would be used to keep track of who owes what to whom. The concept of debt, closely associated with one’s trustworthiness and standing in the community, would have enabled a wide range of economic activities: debts could be paid back over time, transferred, renegotiated, or forgotten – all without having to engage in spot barter or to mint a single coin. In fact, such non-monetary, trust-based, reciprocal economies are still common in closely-knit communities: among families, neighbors, coworkers, or friends.

In such a setting, primitive currencies probably emerged simply as a consequence of having a system of prices: a cow being worth a particular number of chickens, a chicken being worth a particular number of beaver pelts, and so forth. Formalizing such relationships by settling on a single, widely-known unit of account – say, one chicken – would make it more convenient to transfer, combine, or split debts; or to settle them in alternative goods.

Contrary to popular belief, for communal ledgers, the unit of account probably did not have to be particularly desirable, durable, or easy to carry; it was simply an accounting tool. And indeed, we sometimes run into fairly unusual units of account even in modern times: for example, cigarettes can be the basis of a bustling prison economy even when most inmates don’t smoke and there are not that many packs to go around.

2. The age of commodity money

In the end, the development of coinage might have had relatively little to do with communal trade – and far more with the desire to exchange goods with strangers. When dealing with a unfamiliar or hostile tribe, the concept of a chicken-denominated ledger does not hold up: the other side might be disinclined to honor its obligations – and get away with it, too. To settle such problematic trades, we needed a “spot” medium of exchange that would be easy to carry and authenticate, had a well-defined value, and a near-universal appeal. Throughout much of the recorded history, precious metals – predominantly gold and silver – proved to fit the bill.

In the most basic sense, such commodities could be seen as a tool to reconcile debts across societal boundaries, without necessarily replacing any local units of account. An obligation, denominated in some local currency, would be created on buyer’s side in order to procure the metal for the trade. The proceeds of the completed transaction would in turn allow the seller to settle their own local obligations that arose from having to source the traded goods. In other words, our wondrous chicken-denominated ledgers could coexist peacefully with gold – and when commodity coinage finally took hold, it’s likely that in everyday trade, precious metals served more as a useful abstraction than a precise store of value. A “silver chicken” of sorts.

Still, the emergence of commodity money had one interesting side effect: it decoupled the unit of debt – a “claim on the society”, in a sense – from any moral judgment about its origin. A piece of silver would buy the same amount of food, whether earned through hard labor or won in a drunken bet. This disconnect remains a central theme in many of the debates about social justice and unfairly earned wealth.

3. The State enters the game

If there is one advantage of chicken ledgers over precious metals, it’s that all chickens look and cluck roughly the same – something that can’t be said of every nugget of silver or gold. To cope with this problem, we needed to shape raw commodities into pieces of a more predictable shape and weight; a trusted party could then stamp them with a mark to indicate the value and the quality of the coin.

At first, the task of standardizing coinage rested with private parties – but the responsibility was soon assumed by the State. The advantages of this transition seemed clear: a single, widely-accepted and easily-recognizable currency could be now used to settle virtually all private and official debts.

Alas, in what deserves the dubious distinction of being one of the earliest examples of monetary tomfoolery, some States succumbed to the temptation of fiddling with the coinage to accomplish anything from feeding the poor to waging wars. In particular, it would be common to stamp coins with the same face value but a progressively lower content of silver and gold. Perhaps surprisingly, the strategy worked remarkably well; at least in the times of peace, most people cared about the value stamped on the coin, not its precise composition or weight.

And so, over time, representative money was born: sooner or later, most States opted to mint coins from nearly-worthless metals, or print banknotes on paper and cloth. This radically new currency was accompanied with a simple pledge: the State offered to redeem it at any time for its nominal value in gold.

Of course, the promise was largely illusory: the State did not have enough gold to honor all the promises it had made. Still, as long as people had faith in their rulers and the redemption requests stayed low, the fundamental mechanics of this new representative currency remained roughly the same as before – and in some ways, were an improvement in that they lessened the insatiable demand for a rare commodity. Just as importantly, the new money still enabled international trade – using the underlying gold exchange rate as a reference point.

4. Fractional reserve banking and fiat money

For much of the recorded history, banking was an exceptionally dull affair, not much different from running a communal chicken
ledger of the old. But then, something truly marvelous happened in the 17th century: around that time, many European countries have witnessed
the emergence of fractional-reserve banks.

These private ventures operated according to a simple scheme: they accepted people’s coin
for safekeeping, promising to pay a premium on every deposit made. To meet these obligations and to make a profit, the banks then
used the pooled deposits to make high-interest loans to other folks. The financiers figured out that under normal circumstances
and when operating at a sufficient scale, they needed only a very modest reserve – well under 10% of all deposited money – to be
able to service the usual volume and size of withdrawals requested by their customers. The rest could be loaned out.

The very curious consequence of fractional-reserve banking was that it pulled new money out of thin air.
The funds were simultaneously accounted for in the statements shown to the depositor, evidently available for withdrawal or
transfer at any time; and given to third-party borrowers, who could spend them on just about anything. Heck, the borrowers could
deposit the proceeds in another bank, creating even more money along the way! Whatever they did, the sum of all funds in the monetary
system now appeared much higher than the value of all coins and banknotes issued by the government – let alone the amount of gold
sitting in any vault.

Of course, no new money was being created in any physical sense: all that banks were doing was engaging in a bit of creative accounting – the sort of which would probably land you in jail if you attempted it today in any other comparably vital field of enterprise. If too many depositors were to ask for their money back, or if too many loans were to go bad, the banking system would fold. Fortunes would evaporate in a puff of accounting smoke, and with the disappearance of vast quantities of quasi-fictitious (“broad”) money, the wealth of the entire nation would shrink.

In the early 20th century, the world kept witnessing just that; a series of bank runs and economic contractions forced the governments around the globe to act. At that stage, outlawing fractional-reserve banking was no longer politically or economically tenable; a simpler alternative was to let go of gold and move to fiat money – a currency implemented as an abstract social construct, with no predefined connection to the physical realm. A new breed of economists saw the role of the government not in trying to peg the value of money to an inflexible commodity, but in manipulating its supply to smooth out economic hiccups or to stimulate growth.

(Contrary to popular beliefs, such manipulation is usually not done by printing new banknotes; more sophisticated methods, such as lowering reserve requirements for bank deposits or enticing banks to invest its deposits into government-issued securities, are the preferred route.)

The obvious peril of fiat money is that in the long haul, its value is determined strictly by people’s willingness to accept a piece of paper in exchange for their trouble; that willingness, in turn, is conditioned solely on their belief that the same piece of paper would buy them something nice a week, a month, or a year from now. It follows that a simple crisis of confidence could make a currency nearly worthless overnight. A prolonged period of hyperinflation and subsequent austerity in Germany and Austria was one of the precipitating factors that led to World War II. In more recent times, dramatic episodes of hyperinflation plagued the fiat currencies of Israel (1984), Mexico (1988), Poland (1990), Yugoslavia (1994), Bulgaria (1996), Turkey (2002), Zimbabwe (2009), Venezuela (2016), and several other nations around the globe.

For the United States, the switch to fiat money came relatively late, in 1971. To stop the dollar from plunging like a rock, the Nixon administration employed a clever trick: they ordered the freeze of wages and prices for the 90 days that immediately followed the move. People went on about their lives and paid the usual for eggs or milk – and by the time the freeze ended, they were accustomed to the idea that the “new”, free-floating dollar is worth about the same as the old, gold-backed one. A robust economy and favorable geopolitics did the rest, and so far, the American adventure with fiat currency has been rather uneventful – perhaps except for the fact that the price of gold itself skyrocketed from $35 per troy ounce in 1971 to $850 in 1980 (or, from $210 to $2,500 in today’s dollars).

Well, one thing did change: now better positioned to freely tamper with the supply of money, the regulators in accord with the bankers adopted a policy of creating it at a rate that slightly outstripped the organic growth in economic activity. They did this to induce a small, steady degree of inflation, believing that doing so would discourage people from hoarding cash and force them to reinvest it for the betterment of the society. Some critics like to point out that such a policy functions as a “backdoor” tax on savings that happens to align with the regulators’ less noble interests; still, either way: in the US and most other developed nations, the purchasing power of any money kept under a mattress will drop at a rate of somewhere between 2 to 10% a year.

5. So what’s up with Bitcoin?

Well… countless tomes have been written about the nature and the optimal characteristics of government-issued fiat currencies. Some heterodox economists, notably including Murray Rothbard, have also explored the topic of privately-issued, decentralized, commodity-backed currencies. But Bitcoin is a wholly different animal.

In essence, BTC is a global, decentralized fiat currency: it has no (recoverable) intrinsic value, no central authority to issue it or define its exchange rate, and it has no anchoring to any historical reference point – a combination that until recently seemed nonsensical and escaped any serious scrutiny. It does the unthinkable by employing three clever tricks:

  1. It allows anyone to create new coins, but only by solving brute-force computational challenges that get more difficult as the time goes by,

  2. It prevents unauthorized transfer of coins by employing public key cryptography to sign off transactions, with only the authorized holder of a coin knowing the correct key,

  3. It prevents double-spending by using a distributed public ledger (“blockchain”), recording the chain of custody for coins in a tamper-proof way.

The blockchain is often described as the most important feature of Bitcoin, but in some ways, its importance is overstated. The idea of a currency that does not rely on a centralized transaction clearinghouse is what helped propel the platform into the limelight – mostly because of its novelty and the perception that it is less vulnerable to government meddling (although the government is still free to track down, tax, fine, or arrest any participants). On the flip side, the everyday mechanics of BTC would not be fundamentally different if all the transactions had to go through Bitcoin Bank, LLC.

A more striking feature of the new currency is the incentive structure surrounding the creation of new coins. The underlying design democratized the creation of new coins early on: all you had to do is leave your computer running for a while to acquire a number of tokens. The tokens had no practical value, but obtaining them involved no substantial expense or risk. Just as importantly, because the difficulty of the puzzles would only increase over time, the hope was that if Bitcoin caught on, latecomers would find it easier to purchase BTC on a secondary market than mine their own – paying with a more established currency at a mutually beneficial exchange rate.

The persistent publicity surrounding Bitcoin and other cryptocurrencies did the rest – and today, with the growing scarcity of coins and the rapidly increasing demand, the price of a single token hovers somewhere south of $15,000.

6. So… is it bad money?

Predicting is hard – especially the future. In some sense, a coin that represents a cryptographic proof of wasted CPU cycles is no better or worse than a currency that relies on cotton decorated with pictures of dead presidents. It is true that Bitcoin suffers from many implementation problems – long transaction processing times, high fees, frequent security breaches of major exchanges – but in principle, such problems can be overcome.

That said, currencies live and die by the lasting willingness of others to accept them in exchange for services or goods – and in that sense, the jury is still out. The use of Bitcoin to settle bona fide purchases is negligible, both in absolute terms and in function of the overall volume of transactions. In fact, because of the technical challenges and limited practical utility, some companies that embraced the currency early on are now backing out.

When the value of an asset is derived almost entirely from its appeal as an ever-appreciating investment vehicle, the situation has all the telltale signs of a speculative bubble. But that does not prove that the asset is destined to collapse, or that a collapse would be its end. Still, the built-in deflationary mechanism of Bitcoin – the increasing difficulty of producing new coins – is probably both a blessing and a curse.

It’s going to go one way or the other; and when it’s all said and done, we’re going to celebrate the people who made the right guess. Because future is actually pretty darn easy to predict — in retrospect.

16-Year-Old Boy Arrested for Running Pirate TV Service

Post Syndicated from Andy original https://torrentfreak.com/16-year-old-boy-arrested-for-running-pirate-tv-service-171211/

After more than a decade and a half in existence, public pirate sites, services, and apps remain a thorn in the side of entertainment industry groups who are determined to close them down.

That trend continued last week when French anti-piracy group ALPA teamed up with police in the Bordeaux region to raid and arrest the founder and administrator of piracy service ARTV.

According to the anti-piracy group, the ARTV.watch website first appeared during April 2017 but quickly grew to become a significant source of streaming TV piracy. Every month the site had around 150,000 visitors and in less than eight months amassed 800,000 registered users.

“Artv.watch was a public site offering live access to 176 free and paid French TV channels that are members of ALPA: Canal + Group, M6 Group, TF1 Group, France Télévision Group, Paramount, Disney, and FOX. Other thematic and sports channels were broadcast,” an ALPA statement reads.

This significant offering was reportedly lucrative for the site’s operator. While probably best taken with a grain of salt, ALPA estimates the site generated around 3,000 euros per month from advertising revenue. That’s a decent amount for anyone but even more so when one learns that ARTV’s former operator is just 16 years old.

“ARTV.WATCH it’s over. ARTV is now closed for legal reasons. Thank you for your understanding! The site was indeed illegal,” a notice on the site now reads.

“Thank you all for this experience that I have acquired in this project. And thanks to you who have believed in me.”

Closure formalities aside, ARTV’s founder also has a message for anyone else considering launching a similar platform.

“Notice to anyone wanting to do a site of the same kind, I strongly advise against it. On the criminal side, the punishment can go up to three years of imprisonment and a 300,000 euro fine. If [individual] complaints of channels (or productions) are filed against you, it will be more complicated to determine,” ARTV’s owner warns.

ALPA says that in addition to closing down the site, ARTV’s owner also deactivated the site’s Android app, which had been available for download on Google Play. The anti-piracy group adds that this action against IPTV and live streaming was a first in France.

For anyone who speaks French, the 16-year-old has published a video on YouTube talking about his predicament.

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