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In November 2017, Dotcom announced he would marry his fiancé, Elizabeth Donnelly, on 20 January 2018 – the anniversary of the raid during which he was arrested. Dotcom is 21 years older than Donnelly. They had been dating for two years and in 2017 moved to Queenstown to live.

The Internet Party was deregistered on 12 June 2018 because its membership had dropped below the 500 required for registration.

On 5 July 2018, the New Zealand Court of Appeal upheld the High Court's decision that Dotcom and the three co-accused could be extradited to the United States. In particular, the Court, disagreeing with Justice Gilbert, found that, even during the time of Megaupload's operations, it is a criminal offence in New Zealand to possess digital copyrighted works with an intention to disseminate them. Accordingly, Dotcom and his co-accused could be extradited on the basis of copyright infringement to stand trial in the United States. Dotcom's lawyer said that he would appeal the ruling to the Supreme Court. In June 2019, Kim began "a final appeal to halt his extradition from New Zealand to the US".

On 20 February 2017, a New Zealand court ruled that Dotcom, as well as co-accused Mathias Ortmann, Bram van der Kolk and Carter Edwards, could be extradited to the US on fraud charges related to Megaupload. Dotcom denies any wrongdoing and has accused US authorities of pursuing a vendetta against him on behalf of politically influential Hollywood studios. On 5 July 2018, the New Zealand Court of Appeal upheld the lower court's ruling. His lawyer said that he would appeal the decision to the Supreme Court.

In November 2017, Dotcom and his former wife Mona accepted a confidential settlement from the police over the raid. The settlement came after a damages claim was filed with the High Court over the "unreasonable" use of force when the anti-terrorism Special Tactics Group raided his mansion in January 2012. Settlements have already been reached between police and Bram van der Kolk and Mathias Ortmann who were also arrested. The New Zealand Herald reported that their settlements were six-figure sums and "it is likely Dotcom would seek more as the main target in the raid". Commenting on the settlement, Dotcom said: "We were shocked at the uncharacteristic handling of my arrest for a non-violent Internet copyright infringement charge brought by the United States, which is not even a crime in New Zealand".

The party remained leaderless until 8 February 2017, when Suzie Dawson was appointed as its new leader for the 2017 general election. The Mana connection was dropped and the party contended as the single entity the Internet Party. The Internet Party ran 8 party list candidates. The party won only 499 votes (0.0%) and failed to win any seats in the New Zealand House of Representatives.

In February 2017, the New Zealand High Court upheld the earlier decision of the district court that Dotcom and his three co-accused could be extradited to the United States. However, Justice Murray Gilbert accepted the argument made by Dotcom's legal team that he and his former Megaupload colleagues cannot be extradited because of copyright infringement. The judge said he made this decision because: "online communication of copyright protected works to the public is not a criminal offence in New Zealand". However, Justice Gilbert said there were "general criminal law fraud provisions" in New Zealand law which covered the actions of the accused and they could be extradited on that basis.

On 22 May 2017, Dotcom posted a statement on his website saying that he had information relevant to the investigation into the July 2016 murder of DNC staffer Seth Rich. Dotcom said that he had proof that Rich was the source of the 2016 Democratic National Committee email leak, and that he was willing to provide evidence if US special counsel Robert Mueller could guarantee his safe passage from New Zealand to the United States. Seth Rich's family issued a statement calling Dotcom's statements "ridiculous, manipulative, and non-credible." Also in 2017, the biographical documentary Kim Dotcom: Caught in the Web, directed by Annie Goldson, premiered at the New Zealand International Film Festival.

The media criticised Dotcom for 'failing to deliver' at the Moment of Truth after saying for three years that he could prove John Key had lied in relation to his copyright case. After the election, in which the Internet Mana alliance failed to win a seat, public support for Dotcom seemed to dissipate. Dotcom said in January 2015 he had become such 'a pariah' in New Zealand that he might as well leave the country.

After three years' legal wrangling, involving two supreme court cases and 10 separate delays in the proceedings, extradition proceedings finally got underway in an Auckland court on 21 September 2015.

On 23 December 2015, North Shore District Court Judge, Nevin Dawson, announced that Dotcom and the three other Megaupload co-founders were eligible for extradition. He said the US had a "large body of evidence" which supported a prima facie case. An immediate appeal was lodged by Dotcom's lawyer.

In February 2014, the New Zealand Court of Appeal deemed the raids on Kim Dotcom to be legal but not the FBI's taking of information. Dotcom appealed this decision to the Supreme Court. In December four of the five judges agreed with the Court of Appeal that the raid was legal and ordered Dotcom to pay $35,000 costs. Chief Justice Sian Elias dissented, saying there had been a miscarriage of justice as the search warrant was too broad.

A month before the Supreme Court decision, Dotcom's legal team quit after he had spent $10 million on his defence, financed the Internet Party, then run out of money. When the US tried to have his bail revoked, a new lawyer, Ron Mansfield, helped keep him out of prison. In December 2014, events took another turn when the High Court in Hong Kong ruled that the United States "did not have a clear path to serve a legal summons on Dotcom's filesharing company" and he could take a case to get back $60 million seized by authorities there. In making this decision, Judge Tallentire said, "No one can say when that process of extradition will be completed given the appeal paths open to the various accused. Indeed, no one can say if it will ever be completed".

In September 2013, Dotcom revealed he aspired to enter New Zealand politics. On 27 March 2014, Dotcom founded the Internet Party. In May 2014, it was announced that the Internet Party would form a political alliance with the Mana Party, led by local activist and sitting Member of Parliament Hone Harawira. The deal was brokered to serve the Mana Party financially, with the combined structure's political campaign in the 2014 general election being primarily funded by Dotcom. In contrast, the fledgling Internet Party was to benefit from the possibility of seats in parliament in the event that the combined structure were to achieve a greater percentage of the country's vote, helped along by the Mana Party's existing seat. Due to his citizenship status, Dotcom was ineligible to become a member of parliament, and Laila Harré, a veteran of left-wing politics and trade unions, was chosen as leader of the Internet Party.

On 16 September 2014, Dotcom held an event in the Auckland Town Hall five days before the election in which he promised to provide 'absolute proof' that Prime Minister John Key knew about him long before he was arrested. The event was billed as the 'Moment of Truth' and included the release of an email dated 27 October 2010 from Kevin Tsujihara, the chief executive of Warner Bros. to a senior executive at the Motion Picture Association of America – the lobby group for the Hollywood studios. The New Zealand Herald, which broke the story, contacted Warner Bros., who said the email was a fake.

In the 2014 general election, the joint Internet Party and Mana Movement gained 1.42% of the nationwide party vote but failed to win any seats. Dotcom, who was not a candidate because he is not a New Zealand citizen, sank $NZ3.5 million dollars into the Internet Party, the largest personal contribution to a political party on record in New Zealand, according to the national Electoral Commission. "I take full responsibility for this loss tonight," Dotcom told reporters as election results became clear, "because the brand—the brand Kim Dotcom—was poison for what we were trying to achieve". The Serious Fraud Office investigated the email and determined that it was a forgery.

On 25 December 2014, Dotcom helped stop the Christmas DDoS attacks on Xbox Live and PlayStation Network by giving Lizard Squad 3,000 $99 one year MEGA accounts which would then be converted to lifetime accounts worth approximately $300,000.

In 2013, Dotcom launched another cloud storage service called Mega, although he later severed all ties with the service in 2015. He also started and funded the Internet Party. The party contested the 2014 New Zealand general election under an electoral alliance with the Mana Movement, and the 2017 general election, but failed to win any seats at either election.

As a teenager, Schmitz acquired a reputation in his native Germany after saying that he had bypassed the security of NASA, the Pentagon and Citibank under the name of Kimble – based on the character of Dr Richard Kimble in the long-running television programme The Fugitive. He also stated that he had hacked corporate PBX systems in the United States and said he was selling the access codes at $200 each, bragging that "every PBX is an open door to me".

It was anticipated that Dotcom would contribute to New Zealand through investment, consumption and philanthropic activities – he has given $50,000 to the mayoral fund following the 2011 Christchurch earthquake, another $50,000 to a rugby player who was left in a wheelchair after an on-field injury and funded a $600,000 fireworks display in Auckland harbour. Tuck says Dotcom disclosed his previous convictions and these had been considered; they occurred more than 16 years earlier and did not involve harming anyone. Dotcom also told Immigration New Zealand his convictions had been "erased" from his record under Germany's clean-slate legislation.

Despite granting him residency, Immigration New Zealand expressed concern that their decision might attract criticism that they had allowed Dotcom to buy his way into the country, and officials tried to keep it secret. Officials red-flagged his application: "We are requesting that this application be kept as confidential as possible to avoid further media speculation or attention." Dotcom's residency status subsequently became the subject of intense media speculation when it came to light that Auckland mayor John Banks had become involved, and that New Zealand's intelligence services had illegally spied on him  – which they were not allowed to do because he had residency. Immigration New Zealand officers judged Dotcom's convictions in Hong Kong too minor to consider deporting him.

A series of subsequent court decisions delayed every attempt to hold a hearing focused on extradition. In March 2013, Dotcom won a Court of Appeal ruling allowing him to sue the GCSB, rejecting the attorney-general's appeal against a ruling in December 2012. A month later, Dotcom appeared in court again, seeking compensation from police over the raid on his house, which earlier had been deemed illegal.

Dotcom also wrote: "I made mistakes when I was young and I paid the price. Steve Jobs was a hacker and Martha Stuart [sic] is doing well after her insider trading case. I think over a decade after all of this happened it should NOT be the dominating topic. I am 37 years old now, I am married, I have three adorable children with two more on the way (twin girls – yeah) and I know that I am not a bad person. I have grown and I have learned. Making this into an issue about my past is unfair to everyone else working at Mega. Our business is legitimate." "We have spent millions of dollars on legal advice over the last few years and our legal advisers have always told us that we are secure and that we are protected by the DMCA, which is a law in the US that is protecting online service providers of liability for the actions of their users."

In regard to Megaupload, Dotcom says he believes the company had actively tried to prevent copyright infringement – its terms of service forced users to agree they would not post copyrighted material to the website. Companies or individuals with concerns that their copyright material was being posted on Megaupload were given direct access to the website to delete infringing links. Megaupload also employed 20 staff dedicated to taking down material that might infringe copyright. Dotcom also explained that Megaupload was responsible for the transfer of 800 files every second and that it would be impossible to police all that traffic. In addition, US privacy laws, such as Electronic Communication Privacy Act, prohibit the administrators from looking into the accounts of the users.

Dotcom says that he is a legitimate businessman who has been unfairly demonized by United States authorities and industry trade groups such as the RIAA and MPAA. He blames former US President Barack Obama for colluding with Hollywood to orchestrate his arrest and has spoken out against his negative portrayal in the media. In regard to the illegal spying conducted by GCSB, Dotcom said they were not spying to find out where he was. "The GCSB was utilised to surveil all my communication in order to give the U.S. Government full access to all my communication, without the requirement of a warrant," he said. In May 2013, Dotcom released a 39-page white paper that links his prosecution to Hollywood studios. He states that the US government prosecuted him in return for contributions from the studios to President Barack Obama. He released the paper to coincide with the visit to New Zealand of United States Attorney General, Eric Holder, head of the US Justice Department, which oversees the FBI.

In November 2013, The New Zealand Herald senior journalist David Fisher published The Secret Life of Kim Dotcom: Spies, Lies and the War for the Internet. The book covers aspects of Dotcom's personal life and reveals that he fears for his life. He is quoted telling a friend "Don't just let it go", if he is killed as part of US allegations of copyright breaches associated with Megaupload.

In June 2012, Dotcom announced on Twitter the launch of Megabox, a new music streaming service to rival Spotify. He announced in October 2012 that Megabox would launch on 19 January 2013, the first anniversary of the closure of Megaupload and the raid on his Auckland property.

On 2 November, Dotcom announced a new file storage service, similar to Megaupload, using the domain name me.ga. It was to be launched 19 January 2013, but the African state of Gabon, which controls the .ga domain, cancelled the me.ga name on 6 November 2012. The site has since registered the names mega.co.nz and mega.net.nz. The new file hosting service offers file encryption to enhance user privacy and security. As a result of this encryption, Dotcom and mega.co.nz will not know of the content of the uploaded data, allowing for the claim of plausible deniability to be made should new charges arise. In January 2013, Dotcom offered a $13,500 reward to anyone able to defeat the site's security system.

On 4 September 2013, Kim Dotcom stepped down as director of Mega and announced he was working on a music streaming service called Baboom. Dotcom says it will be more advanced than Megabox.

On 10 September 2013, Dotcom announced that he would play 100 people in Call of Duty: Modern Warfare 3 at New Zealand's first Digital Entertainment Expo.

On 28 April 2012 Dotcom revealed he had donated $50,000 to John Banks' mayoralty campaign in 2010, and that Banks had asked him to split the donation in two, allowing the Banks campaign to claim them as anonymous by falling within the anonymous limit of $25,000. In 2014, Banks was found guilty of filing a false electoral return, with evidence from Dotcom playing a major part in the case. This conviction was subsequently overturned on appeal following the discovery of new evidence, and a planned retrial was later cancelled and a verdict of acquittal entered.

Among Dotcom's revelations was a phone call from Banks, thanking him for the contribution. Dotcom subsequently recorded a song titled Amnesia, which mocks John Banks' inability to remember the $50,000 donation. A poll in October 2012 found the New Zealand public had a more favourable view of Kim Dotcom than of Banks.

On 5 January 2012, indictments were filed in Virginia in the United States against Dotcom and other company executives with crimes including racketeering, conspiring to commit copyright infringement, and conspiring to commit money laundering. Two weeks later (20 January), Kim Dotcom, Finn Batato, Mathias Ortmann and Bram van der Kolk were arrested in Coatesville, Auckland, New Zealand, by New Zealand Police, in an armed raid on Dotcom's house involving 76 officers and two helicopters. Assets worth $17 million were seized including eighteen luxury cars, giant screen TVs and works of art. Dotcom's bank accounts were frozen denying him access to US$175m (NZ$218m) in cash, the contents of 64 bank accounts world-wide, including BNZ and Kiwibank accounts in New Zealand, Government bonds and money from numerous PayPal accounts.

On 28 June 2012, High Court of New Zealand Justice Helen Winkelmann found that the warrants used to seize Dotcom's property were illegal because they were too broad. "These categories of items were defined in such a way that they would inevitably capture within them both relevant and irrelevant material. The police acted on this authorization. The warrants could not authorize seizure of irrelevant material, and are therefore invalid." News emerged later that the Crown knew it was using the wrong order while the raid was in progress and Dotcom should have been given the chance to challenge the seizure. The Crown also revealed that police had handed seized hard drives to FBI staff who copied them at the police crime lab in South Auckland and sent the copies back to the US. Justice Winkelmann ruled that the handing of hard drives seized by New Zealand police in the raid to the FBI was in breach of extradition legislation, and the FBI's removal from New Zealand of cloned data from them was unlawful.

Declaring the search warrants to be invalid was a significant victory for Dotcom because he was struggling to pay his mounting legal bills. At a hearing in the High Court on 28 August 2012, Justice Judith Potter allowed Dotcom to withdraw approximately NZ$6 million (US$4.8 million) from his seized funds. He was also allowed to sell nine of his cars. The amount released was to cover $2.6 million in existing legal bills, $1 million in future costs, and another $1 million in rent on his New Zealand mansion.

In May 2012, a district court judge ruled that the FBI should hand over all its evidence against Dotcom relating to the extradition bid. The Crown appealed, but the ruling was upheld by the High Court. The Crown appealed again and in March 2013, the Court of Appeal quashed the previous court decisions. Crown lawyer John Pike, on behalf of the US Government, argued that the district court had no power to make disclosure decisions in an extradition case and that "disclosure was extensive and could involve billions of emails". The Court of Appeal agreed stating that extradition hearings were not trials and the full protections and procedures for criminal trials did not apply. Dotcom's lawyer, Paul Davison, QC, appealed to the Supreme Court. In May 2013, the Supreme Court agreed to hear the case, so it will make the final decision on whether Dotcom should receive all the FBI investigation files before the extradition hearing.

After his arrest by the New Zealand police in January 2012, Dotcom had an ongoing dispute with Prime Minister John Key about when Key had first become aware of Dotcom. Dotcom argued that Key had been involved in a plan to allow him into New Zealand so that he could then be extradited to the US to face copyright charges. Key had consistently said he had never heard of Dotcom until the day before the New Zealand police raid on his mansion in Coatesville.

On 24 September 2012, Mr Key revealed that, at the request of the police, the New Zealand Government Communications Security Bureau (GCSB) had spied on Dotcom, illegally helping police to locate him and monitor his communications in the weeks prior to the raid on his house. The GCSB are not allowed to spy on New Zealand citizens or permanent residents; Dotcom, though not a citizen, had been granted permanent residency. Three days later, the Prime Minister John Key apologized for the illegal spying. "I apologize to Mr Dotcom. I apologize to New Zealanders because every New Zealander… is entitled to be protected from the law when it comes to the GCSB, and we failed to provide that appropriate protection for him."

In December 2012, Chief High Court judge Helen Winkelmann ordered the GCSB to "confirm all entities" to which it gave information sourced through its illegal spying. This opened the door for Dotcom to sue for damages – against the spy agency and the police. The Crown appealed Justice Winkelmann's decision to order the GCSB to provide documents that outlined the extent of their spying, but in March 2013, the Court of Appeal upheld the High Court's decision. Dotcom was not personally granted access to the information but Stuart Grieve QC, who was appointed as a Special Advocate, was given access to the intercepted information. Dotcom argued in the Court of Appeal that the Special Advocate process had miscarried, but the court ruled in the GCSB's favour. Dotcom sought leave to appeal to the Supreme Court but in February 2020, the Supreme Court rejected his appeal and ordered him to pay $2,500 in costs to the GCSB.

Dotcom saw this decision as a major victory saying: "The major part of this litigation has been won by this judgement - that copyright is not extraditable." The ruling opened the door to further appeals because the warrant which was served on him when he was arrested on 20 January 2012, stated he was being charged specifically with "copyright" offences. Both sides are expected to challenge aspects of the ruling before the New Zealand Court of Appeal and eventually the Supreme Court.

On 1 March 2012, Dotcom gave his first interview to New Zealand media after his arrest to John Campbell of Campbell Live. He said the services offered by his Megaupload site were not significantly different from comparable services using cloud technology such as Rapidshare or YouTube, and he has just been used as a scapegoat because of his involvement with hacking activities in the past. He explained the close ties of his case to that of Viacom vs YouTube in which the Digital Millennium Copyright Act (DMCA) shielded YouTube from the infringement of its users and described his surprise when he was arrested without trial or a hearing.

New Zealand Prime Minister John Key added to speculation about Hollywood's role in October 2012 when it was announced he was going on a four-day visit to meet top studio executives. Key said the trip was intended to promote New Zealand as a good country to produce movies, but he was planning to meet with the Motion Picture Association of America (MPAA), which had described Dotcom as "a career criminal". Using Twitter, Dotcom said that Chris Dodd was "responsible for the destruction of Megaupload & the abuse of my family".

In February 2012, Lindsey Stirling released Lord of The Rings Medley, a music video funded by Dotcom.

In August 2012, Dotcom released a song titled Party Amplifier as a sample of his upcoming album. Dotcom was already in the process of recording the album with friend and producer Printz Board (who wrote Yes We Can for Barack Obama's 2008 election campaign) when he was arrested. Printz and Dotcom recorded more than 20 songs at Neil Finn's Roundhead Studios in Newton, Auckland – one of which is called Mr President – an electronica protest against Barack Obama, who Dotcom believes was involved in shutting down Megaupload.

Dotcom has been involved in the local community in Auckland. In December 2012, he announced that he would be playing the part of Santa Claus in the play MegaChristmas, run by Auckland's Basement Theatre. In a local ceremony on the first of that month, he turned on the Franklin Road Christmas lights and delivered a speech before the display.

He was granted permanent residence in New Zealand on 29 November 2010. At the time his residency application was being considered, Dotcom had made charitable contributions in New Zealand and was planning a huge fireworks show for the city of Auckland at a cost of NZ$600,000. He leased a NZ$30M mansion in Coatesville, a rural community near Auckland, owned by Richard and Ruth Bradley, the British founders of Chrisco (a Christmas hamper company), and considered one of the most expensive homes in the country. He wanted to buy the mansion when the lease expired.

On his residency application of 3 June 2010, Dotcom answered "No" to the question, "Have you [...] been [...] convicted of an offence committed in the last five years involving dangerous driving." It was later revealed he pleaded guilty to dangerous driving north of Auckland in September 2009. The media speculated at the time that this could provide grounds for deportation.

In 2007, Dotcom met Mona Verga, whom he described as his "soulmate" and the "love of his life", and married her on 10 July 2009. He became the father of twin girls (his fourth and fifth children) when Verga gave birth in Auckland in March 2012, a month after he was released on bail from Mt Eden prison. On 17 May 2014, Dotcom announced on Twitter that he was separated from his wife Mona and was filing for divorce. Four days earlier, Mona had left her directorship positions in the Dotcom family's companies.

While living in Hong Kong, Dotcom visited New Zealand for 10 days in December 2008 and again for two months from August 2009. On his 2009 visit, he bought 12 cars, valued at $3.2 million, and leased a helicopter on a stand-by basis. He applied for residency and received it in November 2010. Immigration New Zealand made its decision on his application—despite his foreign convictions and despite his persona non grata status in Thailand—after officials used a special direction to waive "good character" requirements. Warwick Tuck, head of Immigration New Zealand, said that New Zealand granted Dotcom residency under the "investor plus" category, which allows people to gain residency if they invest $10 million in New Zealand.

Dotcom is the founder and former CEO of the now-defunct file hosting service Megaupload (2005–2012). The company was financially successful, but in 2012 the United States Department of Justice seized its website and pressed charges against Dotcom, including criminal copyright infringement, money laundering, racketeering and wire fraud. Dotcom was residing in New Zealand at the time; at the request of US authorities, New Zealand police raided his home in 2012 and arrested him. Dotcom posted bail, and has been going through lengthy legal proceedings and appeals ever since to avoid being extradited to the United States.

He has been called one of the world's "largest tech entrepreneurs". He changed his surname to Dotcom in 2005, as "a homage to the technology that made him a millionaire". At the time, he was living in Hong Kong, where he set up Megaupload.

Dotcom moved to Thailand to avoid investigation where he was subsequently arrested on behalf of German authorities. In response, he allegedly pretended to kill himself online, posting a message on his website that from now on he wished to be known as "His Royal Highness King Kimble the First, Ruler of the Kimpire". He was deported back to Germany where he pleaded guilty to embezzlement in November 2003 and, after five months in jail awaiting trial, again received a suspended sentence, this time of 20 months. After avoiding a prison sentence for a second time, he left Germany and moved to Hong Kong in late 2003.

Dotcom found Hong Kong to his liking and registered Kimpire Limited in December 2003, soon after moving there. He set up a network of interlinked companies, including Trendax, which he said was an artificial intelligence-driven hedge fund that delivered an annual return of at least 25%. However, Trendax was never registered with Hong Kong's Securities and Futures Commission and the company was legally not allowed to accept investments or to conduct trades. After moving to New Zealand, Dotcom was convicted for failing to disclose his shareholding to the Securities and Futures Commission, and was fined HK$8,000.

In February 2003, at the same time he registered Trendax, Dotcom set up another company called Data Protect Limited, but changed the name to Megaupload in 2005. He was the chief executive officer. Megaupload was an online file hosting and sharing service in which users could share links to files for viewing or editing. In 10 Facts about the Megaupload Scandal, Dotcom describes the company like this: "Megaupload is a provider of cloud storage services. The company's primary website, Megaupload.com, offered a popular Internet-based storage platform for customers, who ranged from large businesses to individuals. This storage platform allowed its users to store files in the Internet "cloud" and to use, if needed, online storage space and bandwidth." The company was successful. However, millions of people from across the globe used Megaupload to store and access copies of TV shows, feature films, songs, porn, and software. Eventually it had over 150 employees, US$175 million revenues, and 50 million daily visitors. At its peak Megaupload was estimated to be the 13th most popular site on the Internet and responsible for 4% of all Internet traffic.

Prior to his arrest in New Zealand, he enjoyed a luxurious life. In 2001, his main source of income was a company called Kimvestor, which he valued at 200 million euros. He is known for spending his money on expensive cars and boats. On one occasion he spent $1 million chartering a 240-foot luxury yacht which he moored in Monte Carlo harbour during the 2000 Monaco Formula One Grand Prix, and threw lavish parties for guests including Prince Rainier of Monaco.

In 2001, Schmitz bought €375,000 worth of shares of the nearly bankrupt company Letsbuyit.com and subsequently announced his intention to invest €50 million in the company. The announcement caused the share value of Letsbuyit.com to jump and Schmitz cashed out, making a profit of €1.5 million. One commentator suggested that Schmitz may have been ignorant of the legal ramifications of what he had done, since insider trading was not made a crime in Germany until 1995, and until 2002 prosecutors also had to prove the accused had criminal intent.

Following the 11 September 2001 attacks in the United States, Dotcom launched a group called Young Intelligent Hackers Against Terrorism (YIHAT). He said that he had hacked Sudanese bank accounts belonging to Osama Bin Laden and offered a $10 million reward for information leading to Osama's capture on his now-defunct kimble.org site.

In 1994, he was arrested by German police for trafficking in stolen phone calling card numbers. He was held in custody for a month, released and arrested again on additional hacking charges shortly afterward. He was eventually convicted of 11 counts of computer fraud, 10 counts of data espionage, and an assortment of other charges. He received a two-year suspended sentence – because he was underage at the time the crimes were committed. The judge in the case said the court viewed his actions as "youthful foolishness".

Once the hearing finally got under way, Crown prosecutor Christine Gordon, on behalf of the US Government, called it a "simple scheme of fraud". Defence Lawyer Ron Mansfield's 300 page submission began with the argument that the case should be thrown out because the United States Supreme Court ruled in a parallel case in 1982 that copyright infringement was a civil matter and could not be prosecuted as criminal fraud.

Kim Dotcom (born Kim Schmitz, 21 January 1974), also known as Kimble and Kim Tim Jim Vestor, is a German-Finnish Internet entrepreneur and political activist who resides in Queenstown, New Zealand. He first rose to fame in Germany in the 1990s as an Internet entrepreneur, and was convicted on charges of computer fraud in 1994.

Dotcom was born Kim Schmitz in 1974 in Kiel in the north of Germany in what was then politically West Germany. His mother was Finnish, from Turku, so he holds a Finnish passport and has siblings in Finland. His father was German.