During 2009, when the government of China demanded to stop Internet porn and other objectionable content on it, the Green Dam project came into existence. Initially, Beijing planned to load the software on all PCs sold in China, but the government provided the funds just for the starting 12 months (spanning 2008-2009).

When the funding stopped, the chief team for the project's development of the Dazheng Human Language Technology Academy (HLTA) of Beijing shut its doors.

Furthermore, the team for installation and post-care from Jinhui Computer System Engineering of Zhengzhou is also thinking of closing down, according to Chen Xiaomeng, General Manager of HLTA in the Beijing Times, as reported by CNet on July 14, 2010.

Apart from the lack of funds, there have been other problems too for the Green Dam scheme. The Internet content-scanning application wasn't appropriately developed that put PCs in danger of compromise.

Those criticizing the application are also concerned about its misuse. They think the government of China may use the freely downloadable Green Dam for stopping every sort of content and scanning user activity on the Internet. They also fear that online criminals or the government itself could create a gigantic botnet with the software.

With the Green Dam application installation on a computer and the computer user accessing a website, it may be possible for that website to compromise the system by exploiting these problems. Consequently, these malevolent websites can capture private data, add the system to a botnet, or distribute spam.

Besides, security researchers discovered flaws in the method Green Dam used for processing the latest data on blacklists, allowing the software developers to load malware while carrying out the processing.

They further stated that there were weaknesses in Green Dam's text, URL and filtering mechanism, along with security flaws in the software, which put computers in the danger of being hijacked, as reported by BBC on July 13, 2010.