Megaupload.com was among the world's biggest file-sharing sites with 150 million registered users and about 50 million hits daily. It was big enough that it earned founder Kim Dotcom $42 million in 2011.
The movie industry objected that the site was making money off pirated material; even though, Megaupload is based in Hong Kong and the founder was living in New Zealand, some of the alleged pirated content was hosted on leased servers in Virginia, which was sufficient for U.S. prosecutors to take action.
Thereafter, the site was closed and its founder and three Megaupload employees were arrested in New Zealand on allegations by American prosecutors that they facilitated millions of illegal downloads of films, music and other content, costing copyright holders at least $500 million in lost revenue.
The authorities in New Zealand were able to obtain artwork, weapons, and more than $8 million in funds and cars valued at nearly $5 million after serving 10 search warrants at several businesses and homes around Auckland.
A group of hackers retaliated for the recent news and claimed credit for attacking the Justice Department's website. After investigations by federal officials, it was confirmed that the department's website was down for several hours and the disruption was being "treated as a malicious act." This group of hackers who are also known as "Anonymous" claimed credit and also claimed that they also broke into the Motion Picture Association of America's website.
Fairfax Media located at New Zealand reported that the defendants were present at the courtroom for extradition proceedings which may last a year or longer. Dotcom's lawyer raised objections to a media request to take photographs and video, but then Dotcom spoke out from the dock, saying he didn't mind photos or video "because we have nothing to hide." The judge granted the media access, and ruled that the four would remain in custody until a second hearing Monday.