A former employee of Ubiquiti was arrested on charges of stealing confidential data from the wireless technology company and using it to demand nearly US$2 million (A$2.81 million) in ransom, federal prosecutors said.

Nickolas Sharp, 36, was arrested in Portland, Oregon, where he lives. He faces an indictment in federal court in Manhattan.

The most serious charge against him, wire fraud, carries a maximum sentence of 20 years in prison.

Sharp's attorney, Nick Wooldridge, could not immediately be reached for comment.

According to the indictment, Sharp in December 2020 is alleged to have repeatedly downloaded gigabytes of confidential data from his employer, using a virtual private network to mask his location.