Update on August 7 -
News broke today that Demonoid was busted by Ukrainian authorities in the middle of last week. The that brought the site to its knees late last month was apparently just the beginning.
Government officials reportedly arrived at ColoCall, the largest datacenter in Ukraine, to shut Demonoid down. An anonymous ColoCall source gave a statement to Kommersant (via TorrentFreak). Here is a rough translation from Russian courtesy of Google Translate, with some grammar fixes:
Shortly after this hacker break-in occurred, and even a few days later, came the investigators. Investigators copied all the information from Demonoid's servers, and sealed them. Some equipment was not seized, but now that [the connection] does not work, we were forced to terminate the agreement with the site.
Demonoid's servers may have been closed off, but the site's administrator appears to still be at large. The source noted that the site's management is located in Mexico. In fact,.
The general consensus is that Demonoid did not break Ukranian law. In fact, the site went to extreme measures to avoid the wrath of local authorities: it blocked all Ukranian IP addresses. Nevertheless, it is believed that the U.S. got involved, and suddenly Ukraine started looking into the torrent site.
On Friday, Ukraine's Interior Ministry announced that the site was taken down the night before its First Deputy Prime Minister Valeriy Khoroshkovsky arrived in the U.S. to discuss matters with United States Trade Representative Ron Kirk. One of the issues on the docket was, unsurprisingly, intellectual property rights. In fact, this was the first matter mentioned in their joint statement, which was released by the Office of the United States Trade Representative:
We discussed the importance to each country of greater progress on the 2010 IPR Action Plan for protection and enforcement of intellectual property rights (IPR). The United States supported Ukraine's commitment to redouble efforts, especially those identified in the Action Plan, to implement protections that benefit both Ukrainian and American inventors and creators. The United States also hailed Ukraine's planned increase in intellectual property inspectors, as called for in the 2010 IPR Action Plan, as well as its adoption of a new Customs Code intended to improve customs valuation procedures.
If the site administrator manages to bring back Demonoid, he'll have to find a new country for the site's servers. That's happened before, so there's a chance it will happen again.
Update on August 7 -