In short
Judges dominated Prime’s delay and conflicting statements barred his declare underneath the doctrine of laches.
Prime had instructed officers he owned little crypto earlier than later asserting he held 3,443 Bitcoin.
The onerous drive was destroyed after authorities discovered no hint of digital property throughout their search.
A federal appeals court docket has rejected a Florida man’s try to recuperate greater than $354 million value of Bitcoin he claimed was misplaced when authorities destroyed a tough drive seized throughout his 2019 arrest for counterfeiting and id theft.
In a ruling revealed Tuesday, the Eleventh Circuit upheld a decrease court docket’s determination denying Michael Prime’s movement for the return of property, saying he waited too lengthy to make his declare and that the delay left the federal government unable to return the destroyed onerous drive.
“For years, Prime denied that he had a lot Bitcoin in any respect. And Bitcoin was not on the listing when he sought to recuperate lacking property after his launch from jail,” circuit judges wrote within the enchantment.
It was “solely later” that Prime claimed “to be a Bitcoin tycoon,” they added.
The court docket mentioned Prime had repeatedly instructed investigators, probation officers, and a sentencing choose that he owned little or no crypto, contradicting later claims that he held “shut to three,443 bitcoin.”
Federal brokers, counting on his early statements, ended their seek for Bitcoin and later destroyed the seized gadgets, together with the orange onerous drive on the heart of the case.
Prime, who was sentenced in 2020 to greater than 5 years in jail for access-device fraud, aggravated id theft, and unlawful firearm possession, claimed after his launch that the onerous drive contained the cryptographic keys to his misplaced Bitcoin.
He filed a movement underneath Rule 41(g), which lets defendants search the return of seized property after a case ends. A district court docket denied it in 2024, ruling the gadgets had been “correctly destroyed” and that Prime’s years of denial made his declare too late.
The Eleventh Circuit agreed in its ruling, saying Prime’s “inexcusable delay” had “prejudiced the federal government” and that compensation could be inequitable “even when the Bitcoin existed.”
Misplaced cash
Bitcoin itself isn’t saved on a tough drive; it exists on a blockchain, a public ledger shared throughout hundreds of computer systems. What may be saved on a tough drive are the non-public keys or pockets recordsdata that allow somebody entry and spend Bitcoin linked to their addresses.
With out these keys, the Bitcoin remains to be presumably on the market, however successfully unreachable, since possession can’t be confirmed or transferred.
“Misplaced cash solely make everybody else’s cash value barely extra. Consider it as a donation to everybody,” Satoshi Nakamoto, pseudonymous creator of Bitcoin, wrote in 2010.
A 2025 report from Bitcoin-only monetary establishment River Monetary estimates that between 2.3 million and 4 million BTC, representing between 11% to 18% of the full provide, are completely misplaced.
About 3.8 million BTC are linked to wallets which were inactive for over a decade, with round 19.8 million cash mined out of a tough cap of 21 million. River Monetary estimates the efficient circulating provide is probably going between 15.8 million and 17.5 million BTC.
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