Megaupload users may lose their data

OUTLOOK CLOUDY: Earlier this month, federal prosecutors blocked more than 50 million Megaupload users from accessing their data when they pressed charges against seven of the company’s principals. Now, prosecutors say that data could be deleted as soon as Thursday, the AP reports. A letter filed in the case Friday by the U.S. Attorney's Office for the Eastern District of Virginia said storage companies Carpathia Hosting and Cogent Communications Group may begin deleting data Thursday. Megaupload hired the two companies to store the data, for a fee. But Megaupload attorney Ira Rothken said Sunday that the government has frozen its money. Rothken said the company is working with prosecutors to try to keep the data from being erased. He further explained that, besides its customers, the data is important to Megaupload so it can defend itself in the legal case. "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 said. Although Megaupload is based in Hong Kong, the feds said they had authority to act because some of its leased servers are in Virginia. (1/30a)