A judge will hear several arguments on what should be done with the data files that were locked away after the shutdown of Megaupload.
Megaupload’s hosting provider, Carpathia hosting, handed the fate of the 1103 servers of megaupload to Judge O’leary after the hosting company said it can no longer financially maintain the upkeep of the servers.
In its court filing on Monday the company said it will not delete the data on servers like the government is suggesting without a definite opinion from the court.
Carpathia was spending around $9,000 (£5,700) a day in order to maintain Megaupload’s 25 petabytes (25 million gigabites).
The decision is not an easy one as Megaupload wants to keep the data for potential evidence but is no longer able to pay for its upkeep. The U.S. Department of Justice refuses to release some of Megaupload’s seized funds to pay Carpathia and says they prefer that the data is erased.
Megaupload says the data is for the defence of both parties, not just the government’s.
"The government has taken what it wants from the scene of the alleged crime and is content that the remaining evidence, even if it is exculpatory or otherwise relevant to the defence, be destroyed," Megaupload’s defence wrote to the court.
This also conflicts with digital rights group like the Electronic Frontier Foundation that argue users have a right to their data along with film studios who say the illegally obtained data should stay locked up.
Megaupload Founder, Kim Dotcom, was arrested in January after authorities, which included the FBI, shut down Megaupload for online piracy. U.S prosecutors accused the site of inflicting copyright holders with losses in revenue of over $500m.
Dotcom argued that his company simply offered online storage to users. He is now fighting extradition to the United States.
The Justice Department have called the Megaupload indictment the largest of criminal copyright cases ever brought.
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