A Canadian private equity firm has acquired MindGeek, the company behind Pornhub, YouPorn, and other major adult media sites. Financial Times reported that newly formed Ethical Capital Partners acquired MindGeek for an undisclosed amount and that it will continue to operate under an unidentified group of current executives alongside an ECP management team that includes “lawyers and former cannabis investors.” ECP also confirmed the news on its site.

MindGeek is a massive but troubled brand. The company owns some of the highest-trafficked sites on the internet, but it’s also faced persistent criticism that it’s failed to prevent users from uploading or viewing illegal videos, including child sexual abuse material. Its long-standing moderation problems reached a tipping point in 2020 when Visa and Mastercard both cut off service to Pornhub, prompting it to remove most of its videos and build out a mandatory age verification system for actors.

While MindGeek got payment services restored to Pornhub, the payment processors have continued to deny access to its ad network TrafficJunky, after a California court said Visa could potentially be held liable for helping MindGeek “monetize child porn.” Legal challenges against the site remain ongoing, and it could face further pressure as US lawmakers push to weaken liability protections for websites under Section 230. MindGeek’s CEO and COO, Feras Antoon and David Tassillo, both stepped down in mid-2022. This all adds up to a series of challenges that go beyond even the baseline difficulty of running a large web platform in 2023.

ECP’s press release gestures at solving the company’s legal issues. It says it intends to focus on “investing in MindGeek as the internet leader in fighting illegal online content,” including playing “a leading role in the fight against illegal content across the internet” — a role that possibly includes things like the MindGeek-affiliated age verification tool AgeID, which it has previously promoted for use by other adult sites, or its image recognition tool Safeguard.

What, exactly, is Ethical Capital Partners, the investment firm that appeared just in time to make this single transaction? Well, its chairman Rocco Meliambro has roots in Canada’s cannabis industry, where (among other things) he served as a director of National Access Cannabis Corporation alongside fellow director Chuck Rifici — who also just so happened to be in talks to buy Pornhub and other parts of MindGeek two years ago, according to a 2021 report at The Globe and Mail.

Rifici’s company Bruinen Investments, which similarly appeared out of nowhere ahead of a potential deal for Pornhub, also had a prominent reference to ethics — its website promised to put “ethics first to deliver safe, legal and positive online experiences for adults.” Both Bruinen and Ethical Capital Partners also feature a criminal defense lawyer named Fady Mansour, as well as Derek Ogden, a former director of drug and organized crime enforcement for the Royal Canadian Mounted Police, and Sarah Bain, a communications consultant.

If these are the same people, two years apart, what plan might they have for MindGeek? The previous plan was simple: restructure, “rehabilitate its reputation,” and flip it or merge it with a SPAC, according to a slide deck obtained as part of a late 2021 investigation by The Logic. The idea was called Project Narsil, a reference to the broken sword in The Lord of the Rings, and suggested that “the acquisition target is one of the most recognized and undervalued brands in the adult entertainment and technology sector.”