{"id":53425,"date":"2025-11-06T13:13:40","date_gmt":"2025-11-06T06:13:40","guid":{"rendered":"https:\/\/hbbgroup.net\/fbi-cant-be-blamed-for-wiping-hard-drive-with-345m-btc-say-judges\/"},"modified":"2025-11-06T13:13:40","modified_gmt":"2025-11-06T06:13:40","slug":"fbi-cant-be-blamed-for-wiping-hard-drive-with-345m-btc-say-judges","status":"publish","type":"post","link":"https:\/\/hbbgroup.net\/vi\/fbi-cant-be-blamed-for-wiping-hard-drive-with-345m-btc-say-judges\/","title":{"rendered":"FBI can\u2019t be blamed for wiping hard drive with $345M BTC, say judges"},"content":{"rendered":"
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A man convicted of identity theft, who claims his hard drive with over 3,400 Bitcoin was seized and wiped by the FBI, has lost his lawsuit against the government in a US appeals court.\u00a0<\/p>\n

A three-judge panel at the Eleventh Circuit Court of Appeals found<\/a> on Tuesday that Michael Prime can\u2019t sue the government over the loss of a key to access<\/a> around 3,443 Bitcoin (BTC<\/a>), now worth $345 million, as he previously claimed he didn\u2019t own that amount of crypto.<\/p>\n

Prime asked a court after he was released from prison in July 2022 for a hard drive containing<\/a> the Bitcoin to be returned, but the FBI had wiped it as part of its standard procedures, which Prime claimed was illegal; the judges said.<\/p>\n

\u201cFor years, Prime denied that he had much bitcoin at all. And bitcoin was not on the list when he sought to recover missing assets after his release from prison,\u201d the judges wrote. \u201cOnly later did Prime claim to be a bitcoin tycoon.\u201d<\/p>\n

They agreed with a lower court that Prime\u2019s delay in claiming a right to the Bitcoin was unreasonable and bars his suit, adding that \u201ceven if the bitcoin existed\u2014and that\u2019s a big if\u2014awarding Prime an equitable remedy here would be inequitable.\u201d<\/p>\n

Prime claimed to own $1,500 in Bitcoin, judges say\u00a0<\/h2>\n

According to the panel\u2019s opinion, Prime had claimed to own \u201capproximately 3,500 Bitcoin\u201d before he struck a plea deal in November 2019 to admit to device fraud, identity theft, and illegally possessing a firearm.<\/p>\n

\u201cBut after the plea, Prime changed his tune\u2014he no longer claimed to own a significant amount of cryptocurrency,\u201d the judges wrote.<\/p>\n

The panel said that in February 2020, Prime\u2019s financial disclosure to the government reported he owned \u201conly $200 to $1,500 in bitcoin\u201d and later told the probation office that the holdings were \u201chis only remaining asset.\u201d<\/p>\n

A highlighted excerpt from the Eleventh Circuit\u2019s opinion claiming Michael Prime said he owned little Bitcoin. Source: <\/em>US Court of Appeals For the Eleventh Circuit<\/em><\/a>\u00a0<\/figcaption><\/figure>\n

After serving two years in prison and being transferred to a halfway house, the opinion said Prime sued to have the hard drives returned to him, but an Orlando federal court denied the request as they had already been destroyed.<\/p>\n

Related: <\/strong><\/em>MEV bot exploit heads to US court, testing crypto\u2019s legal gray zones<\/strong><\/em><\/a><\/p>\n

The appeals court opinion said Prime tried to \u201cexplain away\u201d his lower figure by claiming that he was reporting that the \u201cmarket value of a single bitcoin at that time was between $200 and $1,500.\u201d<\/p>\n

\u201cWe don\u2019t buy it,\u201d the judges wrote, adding that the valuation \u201cis preposterous\u201d as Bitcoin was worth over $10,000 at times in February 2020.<\/p>\n

A cryptographic key is the only way to access Bitcoin stored on a physical device, such as a hard drive or wallet, and losing it also means losing access to the funds inside.<\/p>\n

Glassnode data<\/a> shows that around 1.46 million BTC, or nearly 7% of its total 21 million supply<\/a>, is likely lost forever.<\/p>\n

Estimates vary, however, as Chainalysis reported<\/a> in 2018 that the amount of Bitcoin permanently lost could be as high as 3.7 million BTC, which is over 17.5% of its total supply.<\/p>\n

Magazine: <\/strong><\/em>Legal issues surround the FBI\u2019s creation of fake crypto tokens<\/strong><\/em><\/a>\u00a0<\/p>\n