PayPal has stopped providing payment services to the Swedish based VPN provider iPredator. In addition, all the organization’s funds have been frozen. iPredator is commonly known as the “Pirate Bay” VPN as it was launched by the old Pirate Bay crew in 2009, but it’s currently operated by an independent non-profit foundation.

Ipredator and Pirate Bay founder Peter Sunde informs TorrentFreak that this disconnection came without prior warning and with no explanation from PayPal as to why the organization is no longer allowed to accept payments. PayPal simply stated that there is “an issue with the account.”

For Sunde and his team the disconnection comes at an unfortunate time. Just three weeks ago iPredator was also kicked out by its credit card payment processor Payson, who changed their terms of services and disallowed VPNs. Sunde believes that the two incidents are related.

“It’s not a coincidence that we are banned from Payson, and then PayPal a few weeks after,” he told TorrentFreak.

The iPredator team has tried to contact PayPal to get more information on the reason for the disconnection, but thus far without luck. The VPN provider still has to find a replacement for Payson as well, but to date have been unsuccessful.

Worryingly, one large European payment processor informed iPredator that they have been put on a blacklist of services that are not allowed to accept credit card payments.

“One processor we talked with, to replace Payson, told us that we were on a blacklist of services that are prohibited to accept credit cards. This apparently happened shortly after Payson announced it could no longer process MasterCard and Visa payments for VPN providers,” Sunde explains.

TorrentFreak has asked both MasterCard and Visa about the claims of an operational blacklist, but both companies denied one exists. However, Sunde believes that they are covering something up.

“It’s a sad day for democracy when third parties interfere with legal business, and then lie about it. This is typically something we hope someone leaks so we can see what they are morally censoring,” he adds.

Mastercard’s Senior Vice President of External Communications, Andrew Bowins, further said that they have no policy to ban VPN services, but that they occasionally disconnect merchants who violate their terms.

“We don’t currently have a policy that unilaterally prohibits VPNs or anonymizers. That said, in order to protect the integrity of the payment system and its participants, we do review merchants to determine whether their models are in compliance with our rules,” Bowins told TorrentFreak.

Neither MasterCard nor Visa could confirm that iPredator was allowed to process credit card payments. Several other payment processors and acquiring banks we contacted regarding the matter did not reply, and PayPal has offered no explanation for their decision either.

For Sunde and the rest of the iPredator team it’s this vagueness and lack of transparency that’s most frustrating. If they are for some reason banned, they would like to know on what grounds.

“If someone SAYS what it is, we can at least argue about it. With the enormous power they have accumulated, they are required to offer some transparency and responsibility,” Sunde tells us.

Without a response from PayPal we can only guess why iPredator is banned. Perhaps it’s their affiliation with the Pirate Bay, the fact that they operate a proxy, or because VPNs are starting to become tricky business. Truth is, we just don’t know.

Meanwhile, iPredator is now forced to go to the “dark corners” of the internet to find payment providers who are still willing to work with them. The VPN provider still has a few payment options left, including Bitcoin, and they hope that the public are willing to support them in during these tough times.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Thus far, these services were believed to adequately hide a user’s IP-address from people they connect to in BitTorrent swarms, but this is not always the case. At the Telecomix Cipher conference a security flaw was revealed that allows third parties to find the true IP-address of someone connected through a VPN.

The security risk is caused by a lethal combination of IPv6 and PPTP-based VPN services, which are very common. IPv6 is the Internet protocol that will succeed IPv4. The protocol is promoted by Windows 7 and Vista, among others, and most people are using it without even realizing it.

The technical details of the vulnerability, explained in this talk (see below), reveal that the true IP-address of users using IPv6 can be easily traced. Even worse, it seems that the Swedish Anti-piracy Bureau may already be using this flaw to gather data on ‘anonymous’ BitTorrent users.

The vulnerability is not limited to BitTorrent either. It can expose people who believe that they are hiding their real IP-address through nearly every connection.

In addition to this gaping hole in VPNs such as Ipredator and Relakks, the talk exposes several other weaknesses from a privacy point of view. Among other things, it is fairly easy to find MAC-addresses and computer names of people who use the same VPN.

The people who run Ipredator are aware of the issue, and TorrentFreak was informed that their users will be notified about the problem. Other VPNs using the same system may want to do the same. From our understanding of the issue, turning IPv6 off should alleviate the threat and make users fully anonymous again.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

File-sharers on the other hand haven’t been sitting still either, as many have chosen to negate these initiatives by going anonymous.

Users of BitTorrent and other file-sharing networks have increasingly turned to solutions that hide their identities from the outside world, rendering these new anti-piracy initiatives useless. The IPREDator service from the founders of The Pirate Bay opened up to the public this week, and is undoubtedly the most talked about newcomer in this business.

With a beta launch coinciding with the introduction of the controversial IPRED law in Sweden, the service promised to offer users an anonymous connection to the Internet. IPRED gave the copyright holders increased power to track down pirates, and with the launch of IPREDator the creators neutralized this new ‘threat’.

Much like many other comparable VPN services, Ipredator allows users to connect to the Internet while hiding their own IP-address. The interest in services like this is booming. In Sweden alone, an estimated 500,000 Internet subscribers are already hiding their identities online, and that number is expected to rapidly grow in the new year.

Ipredator is currently using the same platform as several other VPN franchises including Relakks, which means it’s not really anything we haven’t seen before. The servers are maintained and provided by Pirate Bay affiliates though, which may be more trustworthy to the average BitTorrent user than a random VPN provider.

That aside, we were told by former Pirate Bay spokesman Peter Sunde that contrary to what the legal page states, no logs of any kind are kept by Ipredator. The text that is in there is a left over from the standard template they got from the provider of the VPN platform.

And, according to Sunde, there will soon be even more advantages and added security to Ipredator.

While Ipredator owes its name to the IPRED legislation, the team behind it is also working to crush the Swedish wiretapping law (FRA) that was introduced earlier. Sunde explained in a recent writeup how they are planning to not only encrypt the connection between individual users and the VPN, but also the entire stream of outgoing data from the VPN until it has passed Sweden’s borders.

This will make it practically impossible for the Government to decrypt the data and find out what’s being sent. “The only thing they can do is to make it illegal to encrypt,” Sunde told TorrentFreak.

“People don’t understand why I want to encrypt the traffic, since they’re already hidden when they connect to our system. But they must understand that the same traffic can be found unencrypted, traveling across borders again,” Sunde told TorrentFreak. “Also, using a VPN outside of Sweden is bad for Swedes, since it will raise a suspicion flag at FRA,” he added.

Although these wiretap-busting plans haven’t been implemented yet, Ipredator does already offer a secure VPN connection. The service guarantees that anti-piracy outfits or even your ISP will be unable to record or spy on your BitTorrent downloads. Ipredator has just opened its doors to the public for those who did make the beta and are interested in giving it a try.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

These services, such as The Pirate Bay’s Ipredator, usually charge a recurring monthly fee to pay for bandwidth and hardware bills. However, this week a new player entered the VPN market, offering their services for free – no strings attached.

Named ItsHidden, the free VPN solution has opened up a BETA test to the public, who can now privatize their Internet traffic – including BitTorrent transfers – in next to no time. ItsHidden was set up with torrent users in mind, allowing them to hide their identities from ‘third parties’ who choose to snoop on their activities.

“It has been created to put some rights back in the favor of the user and that includes us,” David from ItsHidden explained to TorrentFreak. “There are so many bodies, mostly unelected that seem to have full access to the most intimate of online details with little or no justification and more importantly, no evidence.”

The service encrypts the connection between the user and ItsHidden’s servers and prevents anyone from reading this data as it is sent or received. We were further assured that no data logs are kept of the user’s transfers. The best news is of course that it’s totally free, and they hope to keep it like this in the future.

“It is a free service, we will of course have to limit in some way eventually to stop the whole lot collapsing, but we will always have a free account. The paid account would be geared at about $5 and will add port forwarding and other features,” David said.

During the BETA phase the service uses shared IP-addresses, but once they have completed more testing ItsHidden will be able to issue static IPs. The servers are all located in The Netherlands at present, but they will spread to other locations once the service is out of BETA.

We have of course tried ItsHidden ourselves and the service is offering good speeds for a VPN, although this might differ based on the user’s location and the load on the network. Right now, we are hoping that it wont collapse once thousands of new users flood the network. Fingers crossed.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

The results of the survey clearly showed that avid file-sharers would rather hide their identities than stop downloading. And indeed, more and more BitTorrent users are seeking ways to protect their privacy online, rendering all the newly proposed anti-piracy laws useless.

TorrentPrivacy and BTGuard are just two examples of services launched in the past year, targeted at concerned BitTorrent users. The goal of these and other anonymity applications is clear; hide the IP-address of the file-sharer so he can’t be tracked down while swapping files.

Currently in beta, The Pirate Bay’s Ipredator uses the same tech platform as the VPN service Relakks. For a few dollars a month it routes all your traffic through its servers, hiding your IP address. Ipredator is currently limited to 3000 users but according to the Pirate Bay team there are another 180,000 users on the waiting list, eager to join.

Running a VPN network for hundreds of thousands of hungry BitTorrent users will prove to be quite a challenge. The infrastructure and bandwidth required by a service targeted at file-sharers is significant, not to mention costly. This undoubtedly leads to problems.

The aforementioned Relakks saw its subscriptions double in just a month when the controversial Ipred law came into effect in Sweden this April. This surge in subscriptions led to to major problems with support and updates according to Relakks’s chairman Jan Erik Fiske.

Unlike more traditional VPN services, BitBlinder recently introduced a free solution. Instead of routing the traffic through a central server BitBlinder passes it on through multiple peers. Each peer in the chain only knows the IP address of the next person in the chain, not the original requester/sender.

A few days after its launch BitBlinder had signed up more than 30,000 new users. Right now registrations are temporarily closed to make sure everything runs smoothly for those already using the service, and while they iron out bugs. “We want to make sure it works, and is secure for everyone,” Josh Albrecht, one of the creators of BitBlinder told TorrentFreak.

Because of the increasing interest in anonymity, the Swedish ISP Alltele decided to offer a free service to conceal the IP-addresses of its customers. According to Alltele’s CEO Ola Norberg thousands of users have downloaded the application, which nearly killed the server it was running on.

These examples clearly show that the scare tactics of the entertainment industry are not going to work. There is no doubt that with every new anti-piracy initiative introduced, more and more users will find their way to one of the many anonymizing services out there.

Instead of stopping the pirates in their tracks the entertainment industry has simply inspired a new ‘industry’ worth millions of dollars.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Many file-sharers already pay a few dollars each month for a VPN service. This type of facility allows the user to protect his Internet connection with encryption while “tunneling’ data in privacy through the servers of a VPN provider, usually located in another country. The user’s ISP-designated IP address remains hidden, revealing only a second IP address provided by his VPN company.

This type of service hinders outsiders from finding the identity of an individual behind an IP address, while helping Internet users effectively side-step laws which may prove inconvenient or unpalatable in their home country.

For those who like to share files, one country set to introduce an extremely unpalatable law is Sweden. Due to come into force in just over a week, the controversial Intellectual Property Rights Enforcement Directive (IPRED) legislation will make it easier for copyright holders to get their hands on the personal details of suspected illicit file-sharers.

But not if the crew of The Pirate Bay have anything to do with it.

Timed to coincide with the introduction of IPRED on April 1st 2009, a brand new service designed to neutralize the effects of the law will be launched. Dubbed ‘IPREDATOR’, this brand new anonymity service from The Pirate Bay promises to make subscribers “more anonymous” than when using traditional VPN services.

Peter Sunde, aka brokep told TorrentFreak that the service is currently in beta and will be slowly opened to around 500 users. When those users are experiencing the service bug-free, it will be opened up to everyone.

Fortunately the service won’t be limited to just Swedish users. Brokep confirmed that anonymity will be available globally for a modest fee of around 5 euros ($6.77) per month.

The weak link in any VPN/anonymity service is always their willingness (or otherwise) to hand over your customer data when pressured under the law. However, with IPREDATOR this should not be an issue since the service is promising to keep no logs of user activity whatsoever.

Anyone who would like to participate in the beta should sign up here.

Stay tuned for further updates.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.