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these businesses have fallen for snake oil salesmen telling them things like VPSs are indicators of "nefarious purposes"

They are indicators. 95% of the abuse on my VPS came from China, services like Contabo, DigitalOcean, Linode, Azure, Oracle, GCP, M247, and Tor. Some of these are no longer allowed to even reach L7 for my website. One other statistic I noticed is that some of those providers have 0% legitimate traffic.

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