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Megaupload founder pleads innocent, bail decision delayed

Rival services begin dropping filesharing as case progresses

Megaupload founder Kim Dotcom has pleaded innocent to charges of piracy and money laundering in the New Zealand court trying him for extradition to the US, saying that authorities are trying to make an example of him.

A decision on whether to grant Mr Dotcom bail has been delayed by the judge until Wednesday at the latest after the prosecution called the defendant a "flight risk at the extreme end of the scale", reports Reuters.

Anne Toohey, speaking for the prosecution, said that Mr Dotcom's possession of several passports and credit cards under various pseudonyms, as well as widely distributed financial investments, means that he would be likely to attempt to flee the charges if released on bail.

"The FBI believes the sums located are unlikely to represent all the overseas bank accounts owned by Mr Dotcom," added Toohey.

Dotcom's defence lawyers countered that their client had surrendered all of his passport documentation, and that his 6'6" frame made him unlikely to pass incognito through ports or airports.

The judge has delayed the decision on bail until Wednesday at the latest, saying the decision was too complex to make immediately.

"Given the breadth of issues covered in this bail application and the seriousness of the issues, I am going to reserve my decision," said Judge David McNaughton.

Toohey added that two more members of the company had also been arrested in Europe and faced the some charges as the other executives.

The FBI's prosecution and attempted extradition of Mr Dotcom and several other Megaupload executives has caught the attention of some of the entrepreneur's rivals, too.

FileSonic, which had previously offered services similar to those of Megaupload, has limited the downloading of files to those who uploaded them initially - presumably in reaction to the case against Megaupload.

"All sharing functionality on FileSonic is now disabled," reads a statement on the site. "Our service can only be used to upload and retrieve files that you have uploaded personally."

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