Megaupload founder Kim Dotcom was denied bail in a New Zealand court Wednesday and remanded in custody until February 22 as US authorities seek his extradition on allegations of massive copyright theft.

Judge David McNaughton declined a bail application from Dotcom, who has been in custody since police raided his Auckland mansion last Friday but vigorously denies any wrongdoing.

McNaughton said he was concerned that Dotcom, who US authorities allege received $42 million from his Internet empire in 2010 alone, would flee the country if released on bail.

"With sufficient determination and financial resources, flight risk remains a real and serious possibility which I cannot discount," he said in a written judgement handed down Wednesday.

The German businessman is among seven people indicted by the US Justice Department and FBI accused of "massive worldwide online piracy of numerous types of copyrighted works, through Megaupload.com" and other sites.

They allegedly generated more than $175 million in criminal proceeds and caused more than $500 million in harm to copyright owners by offering pirated copies of movies, TV programmes and other content.

The US charges Dotcom faces include money laundering and racketeering, which carries a potential 20-year jail term.