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The power to prosecute and the actual ability to prosecute are two different things. They currently can't prosecute CSAM offences nor piracy due to capacity. It won't happen.
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The sad reality is that CSAM and Piracy don't impact the Government, therefore the prosecution is weak and drastically underfunded.

The reality is, VPNs help people learn, have freedoms and explore alternative world views. This is a direct "harm" to the Governments, because they have trouble dictating the narrative.

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The problem is not with the state actually prosrcuting all, or even many vpn "offences". The problem is that the legislation gives states another powerful tool to prosecute people they find annoying but cannot easily punish for clearly breaking other laws.
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Exactly, the effective purpose of overcriminalization is to provide a tool for selective use against “bad” people (those who get in the way). This includes recidivist criminals—though often only those who do damage to someone important—but it also includes counter-establishment activists, influencers, and supporters.
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I think VPN prosecution could happen if it was treated more like traffic offenses than like felonies.

Force ISPs to log all connections and make ISP customers accountable for their traffic, like they are in Germany for example. If you detect an IP to be used for a VPN, ask every ISP to disclose al customers who interacted with it and issue them a ticket. Three tickets and you're denied internet service for two years.

I think this would scare most people off.

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Well true but wait until you do something else and they pile that on top of it.
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