What became of the hacker and crypto advocate?

Kim Schmitz was born on January 21, 1974 in Kiel. According to his own statements, his childhood was heavily influenced by his father’s alcohol addiction. In his autobiography, the 48-year-old describes his living conditions: “My father was an alcoholic. He would sometimes hospitalize me and my mother.” His mother had several jobs at the same time to keep the family afloat.

In order to escape from everyday life, Schmitz takes refuge on the Internet and gives himself the pseudonym “Kimble”. After appearing on television in the mid-1990s, Schmitz built up a flourishing business selling black copies via mailboxes. He can be paid for with stolen telephone credit cards, so-called “calling cards”.

The scam is quickly exposed. After a raid, authorities seize a large number of counterfeit credit and telephone cards. To alleviate the legal pressure, Schmitz changes sides and offers his services to a lawyer. For example, as a test orderer, he procures information about pirated copies. Nevertheless, in 1994 he was tried for fraud, computer fraud, gang stolen goods and misuse of titles. Due to his willingness to cooperate, however, the verdict was relatively mild – two years of probation for the then 20-year-old.

From hacker to young entrepreneur

Schmitz continues to make a name for himself and mutates from hacker to young entrepreneur. After he came across security deficiencies at Deutsche Telekom through a tip, the group offered him a consulting contract in exchange for his silence. With the help of the fee, Schmitz founds his next business project – die Data Protect Consulting GmbH. He later sold 80 percent of the shares in the TÜV Rheinland. Insolvency followed in 2001.

In the midst of the dot-com bubble, Schmitz set up his own venture capital firm, but was charged with insider trading for certain incidents and received a further suspended prison sentence of one year and eight months and a fine of €100,000.

In 2002 Schmitz emigrated. The 28-year-old is initially drawn to Bangkok. It was there in 2007 that he was first brought into contact with the company that would bring him his legendary status – mega upload. Although Schmitz tries to take action against the disclosure of the fact that he is behind Megaupload, the information leaks out to the public.

Megaupload is next to at this time Rapidshare and MediaFire one of the largest providers of file hosting services. The platform is financed by advertising and paid premium access. At the same time, the company joins in mega video, megapixels and mega box into the areas of video, image and music hosting. At peak times, about 155 people work for Megaupload Ltd.

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Megaupload and Kim Dotcom

In 2010 Schmitz is at the peak of his creativity. At the time, Megaupload had around 180 million registered users. The traffic on its platforms now accounts for around 4 percent of all Internet traffic. For example, if you didn’t feel like watching new films in the cinema, you simply googled the film titles at the time and spent a relaxing evening on the couch at home without having to spend a cent – thanks to Megaupload.

In the same year, Schmitz decides to move again – this time to New Zealand, where he still lives today. To bolster his status as a multi-millionaire, the Megaupload CEO adopted the name by which the world will later know him – Kim Dotcom.

The soaring dotcoms came to an end for the time being in 2012. On his birthday, special police forces stormed his property and arrested the newly minted 38-year-old and three other people. His assets will be confiscated and all mega platforms shut down. The reason for the arrest is an arrest warrant from the FBI accusing Megaupload of copyright infringements amounting to more than 500 million US dollars. The plaintiffs include not only the six major Hollywood studios, but also the US music industry association RIAA. In March, the US requests extradition. He faces 20 years in prison if convicted.

Schmitz achieved a first partial success in the legal dispute in July. After a few U-turns, however, the process is still running today.

From internet millionaire to crypto advocate

Away from the legal trench warfare, Dotcom wants to get back to its old glory. In July 2016, he announced a relaunch of his sharehoster service with Bitcoin integration – but it was never released.

After developing into an opinion leader in the crypto scene and launching his own blockchain-based service, the now 48-year-old spoke out again in September last year. He warns of hyperinflation and calls on his followers to buy cryptocurrencies.

Kim Dot-com is arguably the definition of a flamboyant nouveau riche who doesn’t care much about making his opinions known – and (profit-oriented) marketing them. He often had one leg in prison. The disputes with the US judiciary have politicized him and thus also allowed him to mature a bit. Still, dot-com is polarizing the masses. Some see him as a freedom activist, others describe him as a scammer and criminal. One thing he is certain of – an internet legend.

Disclaimer

The article has been editorially revised and first appeared in the November issue of BTC-ECHO Magazine.