The companies that store the data of millions of MegaUpload users plan to start deleting their accounts as early as Thursday.

The site was shut down Jan. 19 following the arrest of seven men, including the company's founder Kim Dotcom, in New Zealand on U.S. accusations that they facilitated millions of illegal downloads of films, music and other content, costing copyright holders at least $500 million in lost revenue.

MegaUpload employs Virginia-based storage companies Carpathia Hosting Inc. and Cogent Communications Group Inc. to store data uploaded by its users for a fee, but has not met its payment obligations because the government has frozen the firm's assets.

Both companies filed a letter in U.S. court on Friday stating they will likely begin wiping data on Thursday.

MegaUpload attorney Ira Rothken said the company is working with prosecutors to try to keep the data of at least 50 million users from being erased.

Aside from its value to customers, the data is critical to MegaUpload's defence in the legal case, he said.

"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."

The FBI is seeking to extradite founder Kim Dotcom and three other men from New Zealand to the U.S. to face charges of conspiring to commit racketeering, conspiring to commit money laundering, copyright infringement, and aiding and abetting copyright infringement over the internet through the website MegaUpload.

With files from The Associated Press