Bitcoin News Today: Court Bars Recovery of $345M Bitcoin Due to Delayed Claims

A U.S. federal appeals court has dismissed a high-profile lawsuit by Florida man Michael Prime, who claimed the FBI destroyed a hard drive containing 3,443 bitcoins—worth an estimated $345 million—during his 2019 arrest for identity theft and fraud. The Eleventh Circuit Court of Appeals ruled that Prime's delayed and inconsistent claims about his cryptocurrency holdings barred his legal action, reinforcing the challenges of recovering lost digital assets from government seizures, as reported by Live Bitcoin News.

Prime was convicted in 2020 of access-device fraud, identity theft, and illegal firearm possession. During his 2019 arrest, the FBI seized a hard drive, which was later wiped following standard protocol for disposing of electronic evidence once investigations concluded, according to Bitcoinsistemi. After his 2022 release from prison, Prime alleged the FBI erased the drive without authorization, claiming it held cryptographic keys to his Bitcoin fortune. However, the court found his claims lacked credibility, noting that Prime repeatedly denied owning significant cryptocurrency during his plea deal, financial disclosures, and sentencing proceedings, as reported by Cryptopolitan.

The court's decision centered on the legal doctrine of laches, which bars claims filed after an unreasonable delay. Judges emphasized that Prime's failure to assert ownership of the Bitcoin for over three years—while repeatedly stating he held only $200 to $1,500 in crypto—prejudiced the government's ability to respond. "Even if the Bitcoin existed," the ruling stated, "awarding Prime relief would be inequitable," a point noted by Live Bitcoin News. The FBI defended its actions, stating it followed standard procedures to secure seized devices and had no reason to preserve the hard drive based on Prime's initial denials, according to Coinotag.

The case highlights broader risks in cryptocurrency ownership. Blockchain analytics firms estimate that between 7% and 18% of Bitcoin's total supply—roughly 2.3 million to 4 million coins—is permanently lost due to misplaced keys, destroyed hardware, or forgotten passwords, according to Coinotag. Experts stress that Bitcoin's decentralized nature means lost coins cannot be recovered without access to private keys, effectively reducing the circulating supply and potentially impacting market dynamics, as noted by Yahoo Finance.

Legal analysts note the ruling underscores the importance of transparency during federal investigations. "Anyone under scrutiny must disclose all assets honestly," said a spokesperson for the Blockchain Association, a point highlighted by Live Bitcoin News, adding that delayed claims often result in permanent forfeiture. The case also aligns with a trend of courts requiring stringent proof of ownership in crypto disputes, particularly when government protocols are followed, the Coinotag coverage observed.

As Bitcoin's price surges, similar cases are expected to rise. However, the Eleventh Circuit's decision sets a precedent that delayed or inconsistent claims will likely face strong judicial resistance, emphasizing the need for prompt legal action and meticulous record-keeping for digital asset holders, as Cryptopolitan noted.

---