Megaupload’s Kim Dotcom’s Bitcache Project Heads To Liquidation
Bitcache is a New Zealand-registered crypto company founded by Megaupload's Kim Dotcom with famed shareholders including Roger Ver and Simon Dixon. It now faces liquidation after a difficult beginning and a failure to launch.
Bitcache follows Cryptopia and Bitcoinica as New Zealand based crypto businesses that have come to an unceremonious end.
What Is Kim Dotcom’s Bitcache?
Dotcom began promoting Bitcache (alongside Megaupload 2.0) in a YouTube video in October 2016.
Bitcache was a blockchain-powered micropayments service, built on the Lightning Network. It was designed to link file transfers to Bitcoin micropayments. In so doing, it combined two of Dotcom’s supposed expertise wheelhouses – file transfer, and Bitcoin.
The broad concept of Bitcache was to provide a reward structure for online content creators, with each file being connected to a BTC microtransaction. Downloads of files uploaded by musicians, content creators, and bloggers could be tied to payments. By being built as a private sidechain, Bitcache proposed that it could overcome the Bitcoin scaling challenge and create a relevant use case for BTC micropayments. Bitcache was meant to be integrated into a digital marketplace solution called K.im, also backed by Dotcom.
In January 2017 it was announced that Bitcache’s cryptographic logic was complete. By August 2017, a live demo site was opened to 10,000 users who had pre-registered for early access. In 2018 an ICO for the project was announced.
It does not appear as though the ICO went ahead. Since then Dotcom has surfaced occasionally over the last few years to promote the project and once claimed it would be the preferred option for online payments by 2022.
Bitcache’s growth has faced a significant barrier because of the ongoing dispute between the US government and Dotcom. Ten years ago, on behalf of the FBI, New Zealand’s elite anti-terrorism squad raided Dotcom’s rented mansion in Coatesville, Auckland. The chaotic event ended with Dotcom being removed from his panic room as officers moved to ensure he did not hit his suspected ‘Doomsday Button’ that would destroy any evidence against him.
Dotcom still lives in New Zealand and still faces extradition charges to the United States. His legal status and position are in flux. He was a director for the Bitcache business until 2017 but left the position – likely to allow the business to operate more freely. He instead became an evangelist for Bitcache.
In classic Dotcom style. Bitcache was meant to launch on January 21st, 2017, five years from the date of the Auckland mansion raid. This however was delayed because of a “hiccup”.
Auckland Lawyer Phil Creagh has said the company applied to be liquidated on May 24th, 2023, and that a hearing is expected to occur in mid-July. The company has not filed a return to the Companies Office since 2021 and is facing removal from the Companies Register.
There is currently one director in the company — Mark Hubble. Hubble is a known Auckland businessman that runs a recruitment business. The business, Radius Contracting, faced scandal after charges of setting up unsafe housing conditions for migrant workers. Another former director of Bitcache is Emmanuel Gadaix, a former Megaupload Technical Director.
The shareholder list also has some eye-catching names. Roger Ver owns a 12.5% share of the company. Ver, once known as ‘Bitcoin Jesus’ is one of the most prominent figures in Bitcoin history. He is one of the five founders of the Bitcoin Foundation, he is currently the executive chairman of bitcoin.com, he led the vocal portion of the community that campaigned for bigger blocks on Bitcoin and he also tried to save the Mt.Gox exchange in 2011 with a childhood friend, Jesse Powell. Powell went on to found the major crypto exchange Kraken.
Simon Dixon and his wife Tara Dixon also own around 10% of the company. Simon Dixon is the CEO & co-founder of the online investment platform BnkToTheFuture.com. BnkToTheFuture was used to raise just over US$1 million for Bitcache in 2017. Dixon is a noted angel investor with investments in Bitfinex, BitPay, Kraken, BitPesa, and BitStamp.
It has been reported that the liquidation is down to Bitcache not paying fees it owes and liquidation is required to recover something out of the business.
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