The latest news is that zFire, his partner, and RedZone are gone from Second Life.
I have been watching this entire privacy debate go on and have one thing to say: It isn't the fact that software like this records your IP address - every site on the Internet does that - it is what they were doing with these IPs that became the problem. They were using them to pair up accounts which may or may not have been alts of each other and using this information without the account owners' consent.
Red flags waved high in the air when it was alleged that zFire was planning to release information to his girlfriend, as well as storing entered and mis-typed passwords that his customers used to access his website for the possibility of hacking into the customer's SL accounts.
The latest to come out is information from zFire's background indicating that he is a convicted criminal. His charges stem from fraudulent dealings on Ebay (see this SLU post for more information). This is something he was sent to prison for, and is still on parole for.
After watching all this information come out, and watching the pieces fall into place, I have been led to the conclusion that Mr. Prime, aka zFire Xue, was intelligent and crafty enough to use his computer skills to whip up yet another scam, this one preying upon SL merchant fears of copybotting. Perhaps he had a slightly altruistic attitude when he started, but by now, it's obvious he intended to data mine and use what he found to benefit himself, in what would likely be yet another illegal manner.
At the very least, he made it clear he intended to attempt to break into people's SL accounts which, by itself, is an illegal activity. What he planned to do from that point would've likely resulted in more illegal activity.
Mr. Prime, didn't you learn ANYTHING from your time behind bars, or are you so much of a sociopath that you are incapable of amending your ways?
I don't feel the least bit sorry for the people that I've dealt with personally, and that others have dealt with, who stood by this man and defended his software to the bitter end. Many of you had your SL password "mined" and could have been a victim. Maybe what you can learn from this is not to let fear of IP theft drive you to extreme preventative measures - especially when those measures are so easily defeated. That fear made you stupid this time. Next time, familiarize yourself with the DMCA process, and should your content BE stolen, follow that process instead.
There will always be thieves, and they will always find ways around the most altruistic and best-written code. That's why we have laws to deal with it. Stop wasting your money and running around in fear. Stop threatening the privacy of others just to give yourself a false sense of security.