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Why did Megaupload 2 launch turn to custard on Jan 20? Dotcom offers explanation

$12m funding deal collapses.

Chris Keall
Tue, 24 Jan 2017

Kim Dotcom has offered an explanation for why his plans to make major announcement on January 20 – the fifth anniversary of his arrest – turned to custard.

Just two hours before the January 20 big reveal, the accused-pirate said his latest ventures, Megaupload 2 and a related micro-payment service called Bitcache had hit a “roadblock”.

He did not offer more details at the time, but this afternoon on Twitter he said that a planned $12 million capital raising involving an un-named listed company in Canada had been abandoned after “The Exchange demonstrated a bias against the merger and requested further detailed and intrusive information” which would have placed “unnecessary burdens”

Had it gone ahead, the deal would have valued his new venture at $100 million, Mr Dotcom says (see full statement end of story).

In October, the entrepreneur fronted an effort to raise $7 million for Megaupload 2/Bitcache through a Caymen Islands-based crowdfunding site.

The effort fell short, but with $1.6 million raised, it did pass the $1.4 million threshold necessary for its backers to access the cash.

Just who were those backers? Mr Dotcom’s exact involvement in Megaupload 2/Bitcache is not clear. A statement on the its project page read: “Due to his ongoing legal disputes with the US government, Kim Dotcom is not the owner of the companies [sic] but the company’s [sic] evangelist.” The money was earmarked for a company incorporated in the Cook Islands, but it was not clear who was behind the company and Mr Dotcom did not respond to NBR's questions.

Ever-decreasing circles
It has been a case of ever-decreasing circles for the stranded German.

According to the FBI, Megaupload was one of the 20 largest websites in the world, and raking in hundreds of millions in revenue.

On the first anniversary of his arrest, Mr Dotcom and his co-accused launched Mega. However, a falling out saw him walked away from the venture, publicly slagging it off. Earlier, an attempts to reverse-list Mega on the NZX in 2014 and 2015 failed, in part because of bad publicity generated by Mr Dotcom's choice of partner: TRS Investments, a shell company whose majority owner, Paul Choiselat, faced multiple market manipulation charges brought by the Australian Securities & Investments Commission. 

An effort "pre-IPO" effort to raise $A4.5 billion for a music sharing site called Baboom across the Tasman stalled in 2014 and ultimately came to nothing.

On Twitter, Mr Dotcom says Megauplaod 2 and Bitcache will now launch later this year.

Waiting for the hammer
Kim Dotcom and his Megaupload co-accused lost their extradition case in December 2015.

A month-long High Court appeal hearing wrapped up September 28. Justice Murray Gilbert has yet to rule on whether the defendants have a case to answer on copyright, racketeering and money laundering charges.

After Justice Gilbert delivers his ruling, the losing side will have the option of taking the case to the Supreme Court.

With his mansion traded for an apartment, his music and political careers and hold and Mega fanboys like Wired and The Guardian showing no interest in Megaupload 2, Dotcom's world seems smaller these days.

He desparately wants to win his appeal. But, ironically, his biggest chance for a return to stardom would be to lose it and get extradited to the US.

Chris Keall
Tue, 24 Jan 2017
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Why did Megaupload 2 launch turn to custard on Jan 20? Dotcom offers explanation