Further, Megaupload argued it is broke, as its assets were frozen in January. The company has been asking the U.S. government to unfreeze some funds in order to pay for the preservation of upwards of 28 petabytes of data stored on the service and needed for the legal cases.

Megaupload attorney Ira P. Rothken said on Thursday that negotiations are still ongoing with the U.S. government, but he expected talks would continue for "days" not "weeks." If negotiations fail, Judge Liam O'Grady of the U.S. District Court for the Eastern District of Virginia will make a decision.

The data is still being stored by Carpathia Hosting in Dulles, Virginia, which says it costs US$9,000 a day to maintain. The Electronic Frontier Foundation filed a brief with the court asserting that users who were not breaking copyright law should be able to recover their data.