Megaupload Founder Insists He's Broke, Defenseless

Brandon Dimmel's picture

It's been less than a year since Megaupload founder Kim Dotcom appeared on CBS to discuss his controversial file-sharing business and show off a sprawling, 60-acre estate located just outside beautiful Auckland, New Zealand. Now, it appears that after a three-year legal fight, things could be coming to an end. Dotcom says he has lost everything in an attempt to defend himself against accusations of copyright infringement.

With over 50 million visitors a day, Megaupload was one of the biggest file-sharing services established on the Internet. It's estimated that Megaupload at one time accounted for 4% of all Internet traffic; the service helped make Dotcom a millionaire, with advertising and subscriptions sold through Megaupload reportedly generating $175 million in revenue.

Authorities Accuse Dotcom of Conspiring to Commit Copyright Infringement

For some time Kim Dotcom has faced allegations that he cost the entertainment industry more than half a billion dollars by running Megaupload. CBS characterized Megaupload as a "virtual warehouse," a place "where people stored and shared digital files."

Unfortunately for Dotcom, his lucrative lifestyle drew the attention of U.S. authorities, who insisted that Megaupload was little more than a virtual black market for movies, songs, video games, and television shows. (Source: Eventually shutdown by the United States Department of Justice, the site ran for seven years (from 2005 until 2012).

Legal Fees leave Kim Dotcom Broke

Now, Dotcom says the cost of defending himself against allegations has left him broke. In a recent teleconference before a crowd at London, England's unBound Digital event, Dotcom said he's facing having to defend himself as the cash supply runs dry.

"My legal team has recently resigned because I ran out of money after spending $10 million to try to defend myself," Dotcom said. The "[U.S. authorities] have certainly managed to drain my resources and dehydrate me, and without lawyers I'm defenseless." (Source:

Dotcom continues to deny he conspired to commit copyright infringement, but admits his legal situation looks dire. "This might be [my] last public appearance," Dotcom said.

Dotcom's Assets Frozen, Lawyer Says

Although he insists he's defenseless, Dotcom has managed to retain the services of American lawyer Ira Rothken. In a recent statement, Rothken outlined the financial troubles facing the Megaupload founder.

"There are assets frozen across the globe," Rothken said. "We're hopeful that courts across the globe, including in Hong Kong and New Zealand, will do the right thing and release funds to counsel." (Source:

What's Your Opinion?

Do you believe that Kim Dotcom is guilty or innocent of copyright infringement? Do you have any sympathy for Kim Dotcom considering his circumstances? Do you think that Dotcom will end up serving a lengthy prison sentence? Do you believe this case marks an important moment in the fight over copyright infringement?

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spiras's picture

...that Dotcom's actions were both lawful and ethical, and that the movie industry's actual losses were at most below 1% of what they claim. It would take me about 5 minutes to do so verbally, but it's too tedious to put it down in writing. Suffice it to say that the film industry is not fighting Dotcom; it's wrestling with technology, and it's doomed to lose.