Aussie VPN relocates offshore to BVI to escape data retention laws

An Australian VPN provider has decided to relocate overseas in order to avoid the country’s new data retention requirements.

The provider, which is called 4TFY, made headlines earlier this year when its founder, Luke Millanta, launched a Kickstarter campaign timed to capitalise on the new Australian Data Retention laws.

Intrusive new Australian data retention laws

Under the new laws, which came into force in April this year, ISPs are now required to retain a wide range of data on anyone using a fixed line connection, Wi-Fi, or a mobile internet connection for a period of two years.

This includes the date and time of their connection, their account name, and connection duration against the service they access. They must also collect location data for each connection.

As we reported at the time, new requirements on Australian ISPs to retain user data saw a surge in VPN use in the country. However, there was also a big debate about whether the new laws would apply to Australian VPN providers too.

We reported at the time about one VPN provider called Wangle, which positioned themselves as the first VPN provider which was in compliance with the new laws and claimed they were required to do so. But another Australian VPN provider, VPNSecure, was adamant the new laws didn’t apply to them.

The debate remains unresolved and at the time of writing and has not been tested in the Australian courts. But Australian VPN users are clearly concerned and have been taking their business to overseas providers rather than domestic-based ones.

Off to the British Virgin Islands

The takeover of 4TFY by what Luke Millanta described as “a consortium of investors” means that this particular provider will now be based in the British Virgin Islands rather than Australia. Given the uncertainty around Australian-based VPN providers, being based offshore would seem to be a real unintended benefit.

The British Virgin Islands have some of the strongest privacy law in the world with absolutely no requirements on companies to retain any customer data. It is already the home of one of the biggest and most secure VPNs on the market right now, ExpressVPN.

Plenty of other prominent VPNs are also headquartered in other offshore locations too, such as Proxy.sh registered in the Seychelles and NordVPN which is based in Panama.

4TFY has not yet formally entered the VPN market and the buyout and relocation are going to delay the rollout of the service slightly. It had originally planned to go live in October, but that has now been pushed back to November.

A questionable business model

Their business model is slightly different to many other VPNs on the market. Rather than a small monthly payment, they offer a lifetime service for a one-off payment which is currently set at AU$119 (US$89). VPNCompare.co.uk would usually urge caution about such deals as VPN networks require ongoing investment and the service offered by providers of lifetime deals tends to drop off as time goes on.

But the model certainly seems to have been attractive to investors. The 4TFY Kickstarter was so successful that not only did they surpass its funding goals, but they raised more than of AU$115,000, which was around four-times what was originally sought.

But it also attracted investors interested in buying the company outright and that is what has ultimately taken the business to the British Virgin Islands. It remains to be seen how much of an impact 4TFY will have with internet users.

But one thing is for sure; being based out of the British Virgin Islands means it is now able to deliver levels of customer security and privacy that is now impossible to deliver from Australia.

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