US authorities have shut down one of the largest file-sharing websites, Megaupload.com, and charged its founders and several employees with copyright crimes.
Four of the company’s staff, including its founders, were arrested in New Zealand and US authorities want to extradite the men to face prosecution for online piracy.
Officials from the US Department of Justice and FBI have described it as "among the largest criminal copyright cases ever brought by the United States."
Megaupload.com went offline last night.
In response hackers group “Anonymous” attacked the public websites of the FBI and the US Justice Department, as well music and recording industry websites. The sites were shut down for a number of hours but have now recovered.
The announcement of the indictment follows protests by Wikipedia, Google and other websites against congressional legislation intended to crack down on online piracy.
Hong Kong based Megaupload Ltd and Vestor Ltd were indicted by a grand jury in Virginia and charged with racketeering conspiracy, copyright infringement and conspiring to commit money laundering.
Armed New Zealand police liaising with US authorities raided ten properties in Auckland. They arrested Megaupload founder and sole shareholder of Vestor, Kim Dotcom, also known as Kim Schmitz, who is a German national.
They also arrested the website's Chief Marketing Officer Finn Batato and Chief Technical Officer and co-founder Mathias Ortmann, both from Germany, as well as Bram van der Kolk from the Netherlands.
All four were denied bail by the district court in Auckland and will appear for another hearing on Monday.
The US Department of Justice and FBI said almost €40 million in assets were seized during the operation along with 18 domain names.
Three more Megaupload staff have been charged but have not yet been arrested.
Conspiracy to commit racketeering and conspiracy to commit money laundering each carry maximum sentences of 20 years in prison, while five years in prison is the maximum punishment for the copyright infringement charges.