Appeals Court Rejects Prisoner's Lawsuit Over Alleged $354M Bitcoin Loss

A federal appeals court has denied Florida man Michael Prime's attempt to recover over $354 million in Bitcoin lost when authorities destroyed a hard drive seized during his 2019 arrest for counterfeiting and identity theft. The Eleventh Circuit confirmed a lower court's ruling, stating Prime waited too long to file his claim and his delay hindered the government's ability to respond. Initially, Prime denied having significant cryptocurrency, reporting little or no Bitcoin to investigators, which led authorities to cease searching for it and ultimately destroy the seized devices. It was only later that he claimed to hold 3,443 Bitcoin, contradicting his earlier statements. The ruling emphasized that Prime’s prolonged denial and conflicting claims prejudiced the government’s position. Compensation for the lost Bitcoin was deemed inequitable even if it existed, as ownership was not verifiable without the destroyed private keys. Bitcoin does not reside on a hard drive; rather, that is where the keys to access it are stored, and without them, the Bitcoin remains unreachable.

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