New Zealand High Court Judge Justice Helen Winkelmann also ruled that the FBI copying data from Kim Dotcom’s computer and taking it outside the country were also illegal.
Winkelmann ruled that the offence was not adequately described in the search warrants.
"The warrants did not adequately describe the offences to which they related," said Winkelmann. "Indeed they fell well short of that. They were general warrants, and as such, are invalid."
Since the ruling New Zealand police said in a statement they were taken the Judge Winkelmann’s ruling into consideration and were in talks to decide which actions should be taken next.
Kim Dotcom is currently on bail in New Zealand currently fighting extradition from New Zealand to the United States.
The U.S. government is seeking their extradition on charges of racketeering, money laundering and copyright infringement.
Megaupload Founder, Kim Dotcom, was arrested in January after authorities, which included the FBI, shut down Megaupload for online piracy.
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U.S prosecutors accused the site of inflicting copyright holders with losses over $500m, while the company generated $175m in revenues.
The file hosting service, Megaupload.com, asked for U.S. criminal charges against the company to be dismissed in June this year, arguing that the U.S. has no jurisdiction over the Hong Kong based service.
Under U.S. law a company cannot be indicted that is not in the United States.
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