A Canadian accused in a massive hack of Yahoo emails will have to stay in custody as he prepares to fight extradition to the United States.

Ontario's appeal court has dismissed Karim Baratov's effort to fight a judge's decision to deny him bail, saying that while the judge made some mistakes, they were not serious enough to affect the outcome.

"At the end of the day, Mr. Baratov remains a significant flight risk, and is alleged to have committed a serious offence," Justice Bradley Miller said in upholding the judge's ruling.

In a decision released Friday, Miller acknowledged the judge erred in finding that Baratov had breached the secure computers at Yahoo, Google and other companies, when in fact he is accused of "spear-phishing," a type of scam used to dupe users into giving away confidential information.

But Miller rejected the defence's allegations that the judge was wrong to describe Baratov as a highly skilled hacker or to find that the 22-year-old made a substantial income from his alleged activities.

"The fact is, Mr. Baratov gave evidence and was not able to persuade the application judge that he had any sources of legitimate income that could account for him acquiring, by age 22, a house, a string of luxury automobiles, and $31,000 in cash," Miller said.

"What is relevant, for the purposes of the application judge's analysis, is that there is evidence that Mr. Baratov is capable of generating significant earnings, not tied to any geographic location, and that this fuels his flight risk. These findings were open to the application judge on the record before him."

Baratov was arrested in March under the Extradition Act after U.S. authorities indicted him and three others -- two of them allegedly officers of Russia's Federal Security Service -- for computer hacking, economic espionage and other crimes.

The judge who denied Baratov bail in April found the young man was too much of a flight risk to be released under the plan proposed by his legal team.

Ontario Superior Court Justice Alan Whitten also said Baratov's parents -- who offered close to $1 million in cash and assets as collateral -- would not make suitable supervisors because they had not questioned his growing wealth or his business activities while he was living with them.

Whitten further said he believed Baratov would be motivated to flee, given that he could face up to 20 years in prison if convicted in the U.S.

Baratov's lawyers had argued that Whitten made several errors, including amplifying the Hamilton man's alleged connection to the Yahoo hack and the Russian intelligence agent who allegedly hired him.

His legal team said in court that there's no evidence to suggest Baratov was involved in the large-scale breach of Yahoo security systems.

Miller took issue Friday with the defence's position that Baratov is accused of a "comparatively minor and victimless crime."

"Whether the applicant was paid nothing or was paid millions; whether the skill and energy expended were advanced or basic; whether he thought he was dealing with (Russian intelligence agents) or with a high school principal, the alleged conduct remains a destabilizing attack on the integrity of systems that are vital to all of our well-being," he said.

"Even unsuccessful attacks imperil public confidence and require the commitment of substantial resources for defence. The public cost, monetary and psychological, is broad and deep."

Baratov's lawyer,Amedeo DiCarlo, said they will now focus their efforts on challenging the extradition order.