Feds say MegaUpload data could be deleted by Thursday

Above: Pop star Will.i.am endorsing Megaupload

In putting the kibosh on MegaUpload, federal prosecutors arrested seven men and froze millions in assets. With their funds in limbo, MegaUpload can’t pay the costs to the companies that store its data, and a letter from the federales says that these companies, Carpathia Hosting Inc. and Cogent Communications Group Inc., can begin deleting the files stored with them as early as this Thursday.

This can’t be welcome news to the people who claim to have uploaded important and perfectly legal files to MegaUpload, and are currently in the process of trying to sue the FBI for seizing their data. To be fair, that group of affected users is spearheaded by a pirate site, which doesn’t exactly lend credence to the idea that there was a large group of users relying on MegaUpload for legit purposes.

Beyond the collateral damage to MegaUpload users, the loss of data might have a more important impact, the destruction of evidence. MegaUpload’s attorney, Ira Rothken, argues that the files stored with these third-party companies may prove valuable in his defense and that it’s in the best interest of all parties to ensure they don’t disappear. “We’re cautiously optimistic at this point that because the United States, as well as Megaupload, should have a common desire to protect consumers, that this type of agreement will get done,” he told the AP.

The FBI copied some data during its seizure, but left the bulk untouched. The government, after seizing MegaUpload’s assets, hasn’t stepped forward yet to assume the costs of keeping this data while the trail moves forward. It’s a reminder that criminal investigations haven’t caught up with the reality of today’s data centers.

Remember that in June of last year, the FBI knocked dozens of innocent sites offline when it seized servers at a hosting facility in Reston, VA. Perhaps the big takeaway is that when it comes to policing the criminal use of data, there is a good chance of collateral damage.