The United States government has formally applied to permanently take control of internet entrepreneur Kim Dotcom's assets.
The move comes as the Court of Appeal considers whether or not to agree with a High Court ruling in April this year that would lift a temporary freeze on cars, cash and property he owns.
Kim Dotcom with his seized cars Photo: Kim Dotcom / Twitter
The assets were seized by New Zealand authorities during a raid of his Coatesville mansion, near Auckland in January 2012 after a request from the US, with the expectation that criminal charges would be laid following Mr Dotcom's extradition there to face copyright and money-laundering charges.
But the extradition hearing has been delayed several times and the temporary freeze has expired. The Crown wants it extended.
At the Court of Appeal on Wednesday, Crown prosecutor David Boldt argued that the basis used to justify the freeze in the US was irrelevant in New Zealand courts. He said it is being requested on a civil basis, meaning there is no expectation that a conviction is needed in order to take the assets.
The court reserved its decision on Wednesday.
In a separate case, Kim Dotcom has been told that he must fully disclose what assets he has to five major movie studios taking legal action against him.
The High Court has ordered that he file and serve an affidavit by 20 August, setting out the nature, extent and value of his assets and where they are.
The movie studios went to court, saying they believed Mr Dotcom has assets falling outside a restraining order and that he was getting rid of them.
Mr Dotcom currently has $11.8 million of New Zealand assets subject to criminal restraining orders.
In their case, the studios cited comments Kim Dotcom made in the media about how much he had funded recently formed Internet Party and relied on statements he made on social media about using a helicopter to travel between Auckland and Queenstown.
Justice Courtney said on Wednesday the $4 million Mr Dotcom has given to the Internet Party is well over what he can currently access under restraining orders. She said in a new ruling there was a danger a future judgement the movie studios get will go unsatisfied as a result of Mr Dotcom disposing assets.
The studios involved are: 20th Century Fox, Disney, Paramount Pictures, Universal and Warner Bros.
After the judgement on Wednesday, Mr Dotcom made reference to the Prime Minister, tweeting: "Hollywood helping John Key to stop me from funding the most disruptive and progressive political party in New Zealand".
He later told Radio New Zealand's Checkpoint programme the timing of the US government request to permanently seize his assets is interesting so close to the general election on 20 September.
"This is happening after I'm making substantial donations to a progressive and disruptive political party in New Zealand that is seriously affecting the National Government. This has been timed to make sure that this progressive political party cannot succeed."
Mr Dotcom said the assets being discussed now fall outside a restraining order.
"The assets that they are talking about now are new assets that were created because of my entrepreneurial skill after the (January 2012) raid. So they're trying to attack assets that have nothing to do with MegaUpload or anything that I have run previously as business operations."
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