Indicted Megaupload founder Kim Dotcom appears on a large screen during the launch of a new file-sharing website "Mega" at his Auckland mansion in New Zealand. (Picture by Chris Keall/arstechnica.com)

While still waiting for extradition from New Zealand to the United States, Kim Dotcom, the indicted Internet tycoon and founder of Megaupload, has launched his new version of file-sharing website “Mega” on Sunday, claiming that the new site complied with copyright law.

The timing of this is no accident. Exactly one year ago, Dotcom was arrested by armed police during a raid to his mansion in Auckland and accused of criminal copyright infringement and conspiracy to commit racketeering. It was the world’s biggest online piracy case. 

Started by Dotcom in 2005, Megaupload was one of the most popular sites on the Web until U.S. prosecutors shut it down. It allowed users to up- and download files, some of which contained copyright-infringing content without permission.

The new mega.co.nz website, which replaces the outlawed Megaupload, went live at dawn. And it attracted certain interest. Dotcom said half a million users registered for Mega in its first 14 hours.

READ MORE: Mega's Massive Launch

Like its older brother Megaupload, Mega allows users to store and share large files. The key difference is an encryption and decryption feature for every file loaded onto the site. The decryption keys for uploaded files are held by the users, not Mega, which means users can control exactly the access to the uploaded files, while the company can't see what is being shared.

It is a smart way, in which Mega not only promises its users increased privacy - as Dotcom labels it "the privacy company" - but also strips itself from legal allegation of knowingly enabling illegal process. According to Dotcom, the concept is simple, "If someone sends something illegal in an envelope through your postal service," he says, "you don't shut down the post office."

Whether Dotcom would be successful remains unknown, but it would certainly have no influence on the ongoing Megaupload case.

Dotcom denied the new site was a revenge to authorities for the raid one year ago, but saying that shutdown of Megaupload forced him to create the new and improved one. "Sometimes good things come out of terrible events," Dotcom said.

Read more on Megaupload here.

Reach reporter Evie Liu here.