Popular file-sharing site WinMX.com ceased operating and the New York office of another, eDonkey.com, appeared to be closed. The turmoil among file-sharing networks follows the landmark ruling by the U.S. Supreme Court in June that held anyone who distributes a device used to infringe copyright is liable for the resulting acts of infringement by others.

In the wake of the decision, the trade group Recording Industry Association of America (RIAA) last week sent out "cease-and-desist" letters to seven file-sharing groups, according to Reuters.

Popular file-sharing sites BearShare, eDonkey and WinMX were reportedly among the targets.

The decentralized nature of most peer-to-peer file-sharing software makes it uncontrollable once it is released over the Internet. However, shutting off sites where users first download the software may strangle the flow of new users.

Users in both Europe and North America complained that the WinMX site (http://www.winmx.com)) was unavailable throughout the day on Wednesday.

The latest developments come on the heels of a pending deal in which file-sharing service Grokster Ltd. is set to be acquired by Mashboxx LLC, a new company formed with the intent of establishing a legal peer-to-peer music company, sources familiar with the matter said.

Both Grokster and Morpheus, distributed by StreamCast Network Inc., were on the losing end of the Supreme Court's ruling.

However, the Mashboxx service is expected to to launch in the next few months. Mashboxx has announced a licensing deal with Sony and is talking with other major labels.

The sources familiar with the matter said Grokster's pending deal with Mashboxx helped pave the way for settlement discussions between Grokster and the major record labels.