Court Orders Paypal to Freeze VPN Company’s Funds in Piracy Case * TorrentFreak

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A federal court in Virginia has signed a temporary restraining order that requires PayPal to freeze the assets of VPN provider VPN.ht. The company is being sued by several movie studios and stands accused of facilitating piracy. The court also signed off on a request to lock the domain name of a Popcorn Time fork, which already appears to have thrown the towel.

paypal-barsHawaiian attorney Kerry Culpepper has made a habit of putting pressure on key players in the piracy ecosystem.

Representing the makers of films such as “Hunter Killer,” “The Hitman’s Bodyguard,” and “London Has Fallen,” he’s gone after individual file-sharers, apps such as Popcorn Time and Showbox, and pirate sites including YTS.

Most recently, Culpepper and his clients expanded their reach to VPN services. Last month, they filed lawsuits against LiquidVPN and VPN.ht, accusing the companies of promoting and facilitating online piracy.

VPN.ht and Popcorn Time Lawsuit

Generally speaking, VPN providers are neutral services. However, these VPNs allegedly crossed a line by explicitly encouraging people to use the service for unauthorized activity. VPN.ht, for example, advised people to use the piracy app Popcorn Time with a VPN “to avoid getting in trouble.”

These allegations have yet to be backed up in court but, before VPN.ht responded to the complaint, the movie studios moved for a temporary restraining order (TRO) to freeze the company’s PayPal funds.

The rightsholders believe that this measure is warranted as VPN.ht’s alleged operator, Mohamed Amine Faouani, previously dissolved another company after it came under fire in a Canadian Popcorn Time lawsuit. They believe that the same could happen with “Wicked Technology,” which currently owns the VPN service.

Freezing PayPal Funds

In an order released late last week, Virginia District Court Judge Rossie D. Alston Jr. agrees that this is indeed likely. As such, he granted the motion to freeze VPN.ht’s PayPal funds.

The court concludes that jurisdiction is appropriate and mentions that Popcorn Time poses a significant threat to the copyright holders. And without a restraining order, VPN.ht could indeed move its PayPal funds outside of the court’s reach.

“Plaintiffs would be irreparably harmed absent a TRO because Defendants would have the incentive and capacity to transfer their assets from any account within the United States, depriving Plaintiffs of the ability to obtain monetary relief,” Judge Alston Jr. writes.

No Harm?

According to the court, there is a strong likelihood that the movie companies will win this case anyway, which weighs in favor of granting the request. At the same time, the VPN provider isn’t really harmed by this decision, the order notes.

“Defendants are unlikely to suffer any cognizable harm from the TRO as they will merely be prevented from profiting from past infringement and moving their funds beyond the reach of the Court.”

While the court suggests otherwise, seizing the assets of a company can seriously impede its operation. That said, PayPal is just one of the payment options used by the VPN and several other alternatives remain available.

Discovery and Locked Domain Name

In addition to freezing the PayPal funds, the court also allows the movie companies to request further information from PayPal, Cloudfare and GitHub. This could help to find out more about VPN.ht’s operation as well as the Popcorntime.app software, which is part of the same lawsuit.

Finally, the court also signed off on a request to order Google or its reseller to lock the Popcorntime.app domain name, so that it can’t be transferred outside of the court’s reach.

At the time of writing VPN.ht remains online and the operator has yet to respond in court. The pressure on Popcorntime.app appears to have paid off, however, as the domain now redirects to a “goodbye” message on Medium.

Meanwhile, the movie companies have just requested yet another temporary restraining order, this time keeping it away from public view. However, it is likely that the copyright holders want to freeze additional funds or assets.

A copy of the order issued by Virginia District Court Judge Rossie D. Alston Jr. is available here (pdf)


Many thanks to TorrentFreak for the breaking news.

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