A federal appeals court has shut down one of the largest-ever bitcoin compensation claims, ruling that a convicted fraudster’s $364 million demand against the U.S. government came far too late and lacked credible proof.
Court Rejects $364 Million Bitcoin Claim
The U.S. Eleventh Circuit Court of Appeals upheld a lower court’s decision dismissing Michael Prime’s $364 million bitcoin claim against the U.S. government. Prime, convicted in 2019 of counterfeiting, identity theft, and firearm offenses, alleged that federal agents destroyed a hard drive containing private keys to thousands of bitcoin. The Nov. 4 ruling followed his appeal of a prior Middle District of Florida decision.
The earlier ruling had rejected Prime’s demand for compensation, finding that the hard drive was lawfully destroyed and that his long delay in asserting ownership barred his claim under the doctrine of laches. The appellate judges agreed, stating that Prime had waited too long to seek recovery and had repeatedly contradicted himself about owning the cryptocurrency. As the court wrote:
Even if the bitcoin existed—and that’s a big if—awarding Prime an equitable remedy here would be inequitable. His delay in claiming a right to the bitcoin and requesting its return bars his suit. We AFFIRM the district court’s judgment.
The panel said his conflicting statements and years of silence left the government unfairly disadvantaged.
Investigators had uncovered counterfeit credit cards, forged identification documents, and electronic devices linking Prime to a large-scale fraud operation. The Eleventh Circuit opinion also noted:
Over four years later, he requested the return of an orange external hard drive that was seized, claiming that it contained the cryptographic keys necessary to access close to 3,443 bitcoin—now worth over $345 million.
According to the court document, by the time Prime tried to retrieve the device, it had already been destroyed under standard evidence disposal procedures, ending any possibility of recovering the alleged cryptocurrency. As of writing, BTC is trading at $105,749, making the value of the claim $364 million.
FAQ ⏰
- What was Michael Prime’s bitcoin claim about? He alleged that U.S. federal agents destroyed a hard drive containing private keys to approximately 3,443 , worth around $364 million.
- Why did the Eleventh Circuit Court reject his claim? The court found Prime’s claim barred by laches, citing his excessive delay, conflicting statements, and lack of credible proof of ownership.
- What did the lower court originally decide? The Middle District of Florida ruled that the hard drive was lawfully destroyed and denied compensation for the alleged .
- Can Prime recover the bitcoin now? No, the hard drive was permanently destroyed under evidence disposal procedures, ending any chance of recovering the cryptocurrency, according to court document.
Author: Kevin Helms
Source: Bitcoin
Reviewed By: Editorial Team
