Criminals or Scapegoats? Kim Dotcom and Pavel Durov | Sidebean

0:00This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online makes sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus. So good, so good, so good. Nordstrom Rack is celebrating 125 years of Nordstrom with 125 of the best deals up to 65% off in stores and online. They're only here while supplies last. So shop today. Great brands, great prices. That's why you rack. Imagine if having your cake and eating it too was about banking. Not baking. Silicon Valley Bank and First Citizens Bank have created a recipe that blends decades of innovation economy experience with more than a century of stability.

1:00Now you don't have to choose between deep sector expertise and lasting financial security. Instead, you can enjoy them both. Silicon Valley Bank and First Citizens Bank. It's the best of bank worlds. Can you go to jail for what your users do on your platform? The answer is a simple yes, we've seen it happen. That is not today's question. Today's question is should let's draw a red line here and add some clearly illegal shit. Let's say a website to hire a hitman. There are clear, undebatable, written laws that you'd be breaking almost anywhere in the world. Conspiracy and solicitation to commit murder, aiding and abetting, accessory to murder, money laundering. The scope of those laws clearly covers the person who facilitates the transaction and puts it on the illegal side of the spectrum, especially because this page was built for that purpose. So why don't you build a website to exchange any kind of servers and then someone without your knowledge, without your involvement, just use that to hire a hitman? Is that your fault? How about the web host?

2:01Would AWS be on the hook for this? How about your internet service provider? How about the company that made the laptop where you built it? And where does the block even stop? And who decides that? And what if the activity on the website is encrypted and you don't even know what's happening? The answer to each one of these questions should be a clear yes or no, but it isn't. And the problem is that rules are being applied differently to different people and different companies and that external interests are dictating how those rules are being applied. Two cases, Pavl Girov, the CEO of Telegram and Kim.com, the founder of Mega Upload, give us all the context that we need to understand. Why? They aren't the only ones who have gone to jail for what their users are doing, but those two stories reveal a serious, much deeper problem we will have to deal with over the next few years. So let me start by getting on the same page about those guys. By the way, I try to be very unbiased in my videos, but I just have to say before I even begin that every single video I saw about Kim.com makes me think that he's like a genuinely cool dude. I played against 100 New Zealanders.

3:03They could come and challenge me. Can we play for a second? Well, not now. We could do it tomorrow. Kim was born in 1974 and quickly became a small celebrity in Germany as a tech expert and as a hacker known as Kimball. And he had his first encounter with my little illegality chart in the 90s. Andres Bach, who was a fellow hacker in the chaos computer club, remembers that he had set up this system to upload Pirated Software, mostly games, and would chart others for access to the server. Kim called this thing the house of coolness, and at the time, we weren't sure if this was overly illegality line. He was not prosecuted for it, so we're, I guess we're just going to leave it in the gray area. What eventually landed him in jail though was not piracy. He came up with this scheme where he bought stolen phone card accounts, information from American hackers. Then he set up these premium told chat lines in Hong Kong and in the Caribbean, and he used a software called a war dialer to call his own call centers and make money from this stolen cards. Apparently he made about 60,000 euro from this. And this scheme and a few others got him convicted for two years in prison in 1998, so

4:06we can definitely put that on the black side of the chart. Kim didn't end up actually going to jail though thanks to Bevegumsthaffo. He was underage when he committed the crime, so he got this suspended sentence thing that they have in Germany, but he didn't learn the lesson. He pulled another one in 2001 after the dot com bubble, a Dutch company, a kind of European group on coalletsbyate.com, was just about to go bust. And then Kim bought about $400,000 worth of shares in the company, and then he announced that he was going to invest $50 million in this business. And that made the share price rise, and then he dumped all of his shares, which made him about $1.5 million. Anyway, you slice it. This is a pump and dump scheme, and it's clearly and undebatably on the far side of that line. He tried to flee to Thailand. He got deported. He ended up pleading guilty, but again, he avoided time in jail thanks to Bevegumsthaffo. After this, he moved to Hong Kong where he would launch mega upload a couple of years later. All of this context was important because it begs the question, did Kim set up mega upload to promote piracy or just as an innocent file exchange?

5:06It's not a site where you could connect to it and say search for avatars. Somebody could upload a file and then pass out a URL on their own, and they're violating the law if it's copyright material like a movie. Let's understand 2005. Brought one was fairly widespread, but it was slow. Average worth and an speed was 1 to 3 megabits per second. No dropbox, no wheat transfer, no Google drive, and honestly not a lot of domain names. You had a .com or you could go with country specific domain names, but there was no domain that was specifically built for startups. But since 2015, now you have .techdomains as an option. A relevant and logical domain name for a tech startup to use. No need to add extra words or context like you would in a .com. A .tech at the end of your startup just says it all. Nothing. .tk, one x.tech, or gti.tech. They're dominating the tech scene and sporting their sleek .tech domain. Also, notice that I didn't have to tell you that they were all tech startups. And they're not alone. More than 500,000 startups worldwide have raised over $5 billion in funding. Also use .tech domains. We've partnered with them not only to sponsor today's video, but to give you guys a 50% discount

6:11on your first year of registration and a few surprises coming up later this year. All you have to do is go to go.tech slash slapping. Get a tech startup domain that gets you out of 2005 and into 2024. But back to 2005, none of the final sharing tools that we have today, email attachments capped at 10 megabytes. So if you need to share a big file online, you were out of luck. And here comes this tool that lets you do it mostly for free. Yeah, I like mega uploads. I like mega uploads. I love mega uploads. I'm E.G.A. uploading me today. Send me a file. Mega uploads. Use the hood other competitors like RapidShare and you send it. But mega uploads out round them all. At its peak, mega uploads was the 13th most visited site in the entire world. According to the company, 87% of Fortune 500 companies were using mega upload. It was a real tool with a real and legal business model, paid subscriptions, ad revenue. But some people used mega upload to share pirated movies and music.

7:13Now we had a... This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block. Or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online makes sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18+. Nordstrom Rack is celebrating 125 years of Nordstrom with 125 with the best deals up to 65% off. In stores and online, we're talking incredible savings on brands you love, like Vince, Sam Edelman, Ragnbone, All Saints, and more. They're only here while supplies last. So shop today. Go into Nordy Club to unlock exclusive discounts. Shop new arrivals first and more. Plus buy online and pick up at your favorite rack store for free. Great brands, great prices. That's why you rack. Imagine if having your cake and eating it too was about...

8:13Banking. Not baking. Silicon Valley Bank and First Citizens Bank have created a recipe that blends decades of innovation economy experience with more than a century of stability. Now, you don't have to choose between deep sector expertise and lasting financial security. Instead, you can enjoy them both. Silicon Valley Bank and First Citizens Bank. It's the best of bank worlds. Had pirated music for years, thanks to Napster. But before I got upload, downloading movies was not a thing, so Hollywood's revenue hadn't suffered from piracy. The music industry had started their own fight years earlier. They had to fight and prove in court that making MP3 copies of files and sharing them, even if it was peer-to-peer and free, was still legal. This whole thing was so new that back then you'd still have people debating whether an MP3 file, which is really just ones and zeros, was even piracy at all. But the scope of copyright laws we found covered MP3s, Napster found out, and it also covered them. Even though Napster was peer-to-peer, which meant that the data never touched its servers,

9:14the court upheld that Napster facilitated the unauthorized reproduction of copyrighted music. And some technical recalls it's supposed to write some stupid books. Napster was fined into bankruptcy, but here's a crucial fact for you. None of the Napster founders ever saw the inside of a jail cell. At least not for pirates anyway. That's not mine. Here's a site built with the purpose of exchanging pirated music, proven in court, illegal stuff, no jail time. Hold that thought. What Kim.com ran is just a service that's like a post office. He was the post office it would be mailed through. Why do you shut down the post office thinking that's where the problem is? Through the 2000s, the piracy problem grew and governments were pushing to crack down on it. The next one to fall was the Pirate Bay, which was a Swedish company, which you could say was outside of Hollywood, US jurisdiction. You could have argued that copyright laws didn't apply here, but as it happens, they did. So the founders of the Pirate Bay, a post office type of website clearly builds with intent

10:18and that upward sentences from a few months to up to a year in prison. Some crazy diplomacy was needed to enforce those laws, because this is Hollywood pushing the US government so that they pushed the Swedish government to go and arrest these guys, and that even extended to the Swedish government pushing the Cambodian, the Laos, the Thailand government to go and extradite these guys, because many of them ended up running to those countries. While in the US, prosecution was also extended to ordinary people. Jamie Thomas Resett was one of them. She's a Native American woman who was prosecuted in 2007 for sharing 24 songs on Kasa, and after a few trials and appeals all the way up to the Supreme Court, she was fined 222,000 dollars, about 9,000 dollars per song for sharing that content online. Also Gloria Stefano to Lincoln Park, that's a wide tense. But as a mother of four, she was probably not going to be able to pay this fine, and she hasn't to this day. And that wasn't the point of the process. It was about sending a message. Also, why specifically her and not any of the other 26 million users that Napster had?

11:18We're coming into the late 2000s now. Mega Upload has 150 employees, 175 million dollars in revenue, and 50 million daily visitors. Very intentionally, Mega Upload was hosted in Hong Kong, where it wasn't that clear if the US had the diplomatic muscle to extradite Kim or to shut down his servers. The rules weren't very clear either. Mega Upload was still a post office type of situation. They made revenue from legit customers that weren't sharing part of the content. So was the entire business still illegal that had yet to be seen in court? It still has to be seen in court. But the US government, and this is Obama Times, was heavily pressured to do something about Mega Upload. I would caution people not to make the assumption that because the quote, Hollywood community has been historically supportive of Democrats, which they have. But make the false assumption this year that because we did it in years past, we will do it this year. While platforms like Google had banned AdSense, they're at engine from Mega Upload. They had done so voluntarily, not because the law required them.

12:18And then the government needed more power to end Mega Upload. So in 2011, Congress introduced SOPA, the Stop on Land Parasy Act. I said of laws that sought to give the government more tools, more power to fight this. The law was kind of vague, and it was truly objectively dangerous for what the internet had become for what the internet is. And tech companies, they all hated it. Suppress user content, they suppress our voices. I'm the dangerous to the tech sector, to companies like Reddit, and also to the way the internet works right now. Under SOPA, if someone made a very beautiful, slight-been presentation and put a link to Mega Upload that contained pirated content, we'd be on the hook. If we didn't act quickly, we could be delisted from search engines, payment processors could block us, and internet service providers could block our servers. Imagine what this would mean for the Reddits, the Facebooks, the Wikipedia's of the world. The law was overreaching, and it was just plain dangerous. And so the day before SOPA was to be voted in Congress, the internet spoke. The online encyclopedia has gone dark for 24 hours.

13:21There's an opposition to the Stop online piracy, or so. Thousands of sites are either blacked out or displaying some sort of protest over two bills making their way through Congress right now. And this worked. The law was withdrawn the next day, but merely hours after this, on the other side of the world, someone was going to pay for it. Top story of the sound, New Zealand is at the center of one of the world's biggest internet piracy investigations. Now, I'm not saying these two things are connected. I'm just saying that the timing was a huge coincidence. A full on raid by the New Zealand police, 76 people, choppers, machine guns, an L-chapel level raid with pressure coming from the other side of the world. The charges, copyright infringements? I mean, okay, I get that. But also, racketeering, money laundering, and wire fraud. They tried to charge him with copyright violation himself for uploading 60 songs or something, but they had come off of CDs. He had purchased. They needed a crime that would get him five years in prison to meet the law, the New Zealand

14:26law for extradition. So they made up phony charges of racketeering, like he's some big mobster connecting, you know, a big financial empire in all these countries. As of shooting this video, we don't know. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had opened for weeks. Gemini and Chrome is here for it. Ready to make anything online makes sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus. Nordstrom Rack is celebrating 125 years of Nordstrom with 125 of the best deals up to 65% off. In stores and online, we're talking incredible savings on brands you love, like Vince, Sam Edelman, Rack and Bone, all Saints and more. They're only here while supplies last, so shop today. Buendenordy Club to unlock exclusive discounts, shop new arrivals first and more.

15:26Plus buy online and pick up at your favorite rack store for free. Great brands, great prices. That's why you rack. Imagine if having your cake and eating it too was about banking. Not baking. Silicon Valley Bank and First Citizens Bank have created a recipe that blends decades of innovation economy experience with more than a century of stability. Now, you don't have to choose between deep sector expertise and lasting financial security economy. Instead, you can enjoy them both. Silicon Valley Bank and First Citizens Bank. It's the best of bank worlds. Only if this charges will stand, which means we have yet to see where Mega Upload lands on this legality scale. What did land on the other side of that line were some elements of the rate itself. Kim has been fighting this for years and several inconsistencies have been found from illegal warrants to illegal data copies. Kim was illegally spied on to the point where an apology had to be issued by the government. So, did Kim build Mega Upload specifically for criminal activity?

16:28Does that make him an accomplice? That's a huge question. That's the question. And I think that he should be liable if he did. But very crucially, do these charges require such a level of raid, international pursuit and extradition? And he argued that he is not responsible for what users do in his platform. Can he argue that he didn't even know? In Mega Upload's new spin-off, Mega, file transfers are end to end encrypted. He couldn't know what they were sending over even if he wanted to. So where does that stand in our legality scale now? Well, welcome to the second Pandora's Box. In our second character for today, Pablo Duraugh. The CEO of Telegram was arrested in France in mid-2024. The charges have a massive list of 12 charges from money laundering to complicit and seek-in-child corn content. CSAM. This list is a stretch. What part of the debate relates to the fact that he might be being prosecuted because of two fundamental rights for humans, which are free speech and privacy and whether we

17:29are entitled to having those on our online communications. The debate over-interned privacy is not new and it became widespread in part thanks to this guy who reveals a secret US government program that had direct access to people's communications on servers from pretty much every major tech company. However, one messaging platform was protected from espionage because it was end to end encrypted from the get-go. In the end to end encryption, the sending device creates a private key that's completely secret and will never be shared outside of that device. It then creates two public keys and sends them over the internet. People who are spying on them might be able to see these private keys because they're travelling over the internet, but that's okay. The receiver gets these keys and then he has his own private key and he uses that to create this mush combination of numbers that includes both the public keys and his private key. So the receiver then sends all this jivrish back to the original sender who then puts his own key into it and sends a message back. So anybody who's intercepted any of these messages, all they have is the public keys or the encrypted message but they can't decrypt what's actually there.

18:31The server through which this message travel can store the message but it can just never decrypt it. Current end to end encryption protocols would take more than the age of the universe to be broken. And there's just no way to get in, at least until IBM solves quantum computers, go watch our video about them. Governments are not happy that end to end encryption exists. To them, the public should not have access to unbreakable encryption or at least they should have the keys which is the very definition of a contradiction. The FBI took Apple to court using this obscure law from 1789 to demand access to the San Bernadier Shooter's phones and 10 other devices around that time. And Apple refused and their refusal was eventually upheld in court because, well, privacy comes first. Even with the potential for more terrorist attacks, in this case, the law said people are entitled to privacy no matter what. I'm sure the government was very mad at Apple and as a company, you don't want to be on the wrong side of the government's favor. But this is Apple. How much can you bully the biggest company in the world and one of your biggest employers

19:33and taxpayers? There have been people that suggest that we should have a back door. But the reality is if you put a back door in, that back doors for everybody, for good guys and bad guys. In the coming years, in part, things to these cases end to end encryption has become a standard everywhere. And that brings us to telegram. Pavledurov, the founder, is Russian. He launched telegram with his brother after having founded VK in 2006, which is basically a Facebook ripoff for Russia, which is great, but not illegal. They weren't strangers to government pressure and that's why they left the company. Sold their shares and used the money to start telegram and from the get-go, structure the company as this legal jurisdiction mess between different shell companies across different countries. Unlike Kim, Pavled's main concern so far had been the Russian government, not the US government or Hollywood execs. And yet, ironically, it'd be a Western government, the French government that ultimately stroked the hammer. Pavledurov has been arrested at a French app. Russia's Mark Zuckerberg arrested shortly after landing in France Saturday night. The app has long faced scrutiny for enabling cyber criminals and extremism.

20:36But, but, but. End to end encryption is only part of the puzzle and not the only reason why Pavled is in jail. The second part of that is free speech. We can probably debate for hours on what free speech is and what its limits are, but I have an example that I think we can probably all agree on. The 2011 Egyptian Revolution. I know this is the first Arab Revolution of the 21st, this 18-day revolution defies all expectations. Really, can a military takeover of being greeted with such enthusiasm? In a nutshell, activists use platforms like Facebook, Twitter, YouTube to organize protests and eventually topple a brutal government regime. That is the epitome of free speech. And the government probably would have slapped every misinformation, fake news, terrorist organization labels on these, or and on the people who are organizing these protests. And that's why governments can't be the ones deciding what free speech is or isn't. And this is one of Telegram's pillars. A mostly unmotorated place for information exchange and not being the ones that decide

21:41what can or can't be shared on the platform as racist, as false, as crazy as it may appear. You might think that Egyptians fighting for freedom deserve a platform where they can talk and connect and you might celebrate the Arab Spring. But if they have access to this, if you think they deserve access to this, on the basis of free speech, then... Nordstrom Rack is celebrating 125 years of Nordstrom with 125 of the best deals up to 65% off. In stores and online, we're talking incredible savings on brands you love like Vince, Sam Edelman, Rack and Bone, all Saints and more.

22:43They're only here while supplies last, so shop today. Go into Nordy Club to unlock exclusive discounts, shop new arrivals first and more. Just buy online and pick up at your favorite rack store for free. Great brands, great prices, that's why you rack. Imagine if having your cake and eating it too was about... banking. Not baking. Silicon Valley Bank and First Citizens Bank have created a recipe that blends decades of innovation economy experience with more than a century of stability. Now, you don't have to choose between deep sector expertise and lasting financial security. Instead, you can enjoy them both. Silicon Valley Bank and First Citizens Bank. It's the best of bank worlds. ISIS also deserves access to a platform like that and so does organizations like Hamas. It's free speech for everyone, not selected based on who's good and who's evil. And this is what has gained Pavel a cult following, essentially. Coast Telegram doesn't take a side. All opinions are allowed. And this position has of course made Telegram a haven for extremist content which don't

23:47get me wrong is extremely dangerous. But if you're going on the premise of free speech, then you must allow this content. Now I think it's terrible that people believe fake news. I think it's terrible that they're allowed to spread to that point. But is it the platform spelt? Should the founder go to jail because they didn't moderate it? I don't think so. And you might disagree with me and this is not an easy conversation. But I think that having a founder arrested for this is wrong and I think that it's a very dangerous precedent. But this isn't over. Those two arguments are Pavel's biggest defense I think, but there's one more. It's absolutely undeniable that Telegram is a nest of criminal illegal activities. It took me all of five minutes using Telegram to find drugs for sale, scams, prostitution, CSAM. Really, I didn't have to look that hard. No, no, it is happening. You could argue that Telegram's lacks policy. Their stand on avoiding government cooperation is part the reason why these criminals are

24:51choosing Telegram to operate. And I'm not saying that Telegram isn't taking action. They are. According to their own channel, they, for example, closed 50,000 CSAM channels in August 2024. But think about that for a second. That's 50,000 channels per month. Some people are degenerates. Yes. Should be prosecuting them. Yes. But if you are knowingly providing a platform that facilitates this behavior to me, you are an accomplice. Plain and simple. The real problem here is that Telegram defenders are going to use the other two arguments to muddy the waters to defend their own position. Oh, it's the government attacking free speech. It's the government cracking down on privacy. Yeah, it probably is that too. And if we're on the privacy above everything, both, then we must also agree that Telegram should not have to reveal the human traffickers information to the government. And I honestly have a hard time reconciling those two things. But I see how nuanced this decision and this discussion is.

25:54But the harsh truth that nobody can deny is that Telegram is a toxic, dangerous platform promoting undebitably illegal content. You don't see the spring of CSAM content or selling legal shit on Facebook groups or signal. Or if they do, they're cracked down much more efficiently. Whatever combination of lacksterms, fame for lack of government cooperation and anonymity, branding, cult following a paddle, Telegram has become a home for this content. And to me, and please disagree with me in the comments, to me, that makes them borderline an accomplice. Just like Kim and Mega Upload might have been an accomplice to sharing private content. This has nothing to do with free speech or with anti-privacy because this is happening on the social, on the public side of Telegram. If we agree that it's the government's responsibility to act on this, well, what can they do? They can block the platform? Some have tried. Another thing they can do is jail the founder to put pressure on the company to send a message to make an example out of him. Which happened?

26:56Happened as we were finishing the production of this video. Telegram announced that it will now collaborate a little more without thories by sharing the IP addresses and the phone numbers of people who are doing criminal activity on the platform. This is of course a win for the French government, but some Telegram users, of course, weren't happy about it. This is not news. They are just making it just to move to the next and reduce their telegram usage. It's still better than what time to leave Telegram, boys. And we could maybe convince ourselves that this is everything that the government wanted, right, just to put some pressure on the founder so that they collaborate more with the government on cracking down with the shady stuff happening on Telegram. The government's governments have made it hard to believe that there isn't another agenda behind all of that. The real problem is not the scope of the law, but the fact that it's applied differently. Look at extreme cases like the founder of Silk Road, who was sentenced to life where the people who actually sold the drugs in his platform are still free. One more evidence you want of how political his arrest was that Trump is now advocating for his release just to gain favor with the Bitcoin crowd.

27:57What political agenda is behind Pavels arrest? Why is he in jail while the founder of 4chan gets a job at Google? What lobbying group, what political party was being affected the most that broke the camel's back? There must be one. There is one. We'll know soon enough. In the meantime, understand that this is not a simple free speech, privacy violations conversation, and it's also not as simple as just a haven platform for criminal activity. There are too many actors at play here, and the right answer to what's really happening is never in the extremes. Now if you want another story that's even crazier, you should watch a video about John McAfee. We'll see you in a quick. Imagine a left brain and a right brain got together and came up with an incredible banking solution. The innovative minds at Silicon Valley Bank and the pragmatic ones at first citizens

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