US attempts to seize Dotcom's assets rebuffed

Mr Dotcom said Megaupload attracted about 50 million users a day at its peak

Net entrepreneur Kim Dotcom is a step closer to reclaiming cars, cash and houses seized during raids in 2012.

On Wednesday, a high court in New Zealand said Mr Dotcom's lawyers could challenge US law enforcement efforts to seize the assets.

The FBI was after the assets as part of its case against Mr Dotcom and the Megaupload service he created.

The FBI alleges that Megaupload was widely used to pirate pop music, films and software.

The court challenge was launched by Mr Dotcom's lawyers following a decision by New Zealand's deputy solicitor general to let US authorities take the assets.

Local newspapers in New Zealand, where Mr Dotcom lives, estimate the assets are worth about NZ$11m (£5.1m). They include government bonds, cars, houses, jet skis, expensive watches and giant TV sets.

The assets were impounded following raids on Mr Dotcom's home and business in January 2012.

The asset grab also applied to NZ$700,000 for legal fees to which Mr Dotcom recently won access in a separate legal case.

High court judge Rebecca Ellis found in favour of Mr Dotcom because the application to seize the assets was made under a US law, known as fugitive disentitlement, that is not recognised in New Zealand.

The raids in 2012 marked the start of the legal action against Megaupload. The FBI said he made millions from the service and did little to police its users.

Mr Dotcom said Megaupload was no different to other net-based storage services and its administrators made many efforts to stifle abuse.