Michael Prime Loses Appeal Over Destroyed Hard Drive and Lost Bitcoin

A federal appeals panel has upheld the dismissal of Michael Prime’s attempt to recover what he said were thousands of bitcoin tied to a seized hard drive.  As first reported by Bitcoin.com News, the ruling from the U.S. Eleventh Circuit Court of Appeals supports a previous decision from the Middle District of Florida.

Good to Know

• Prime claimed the hard drive held private keys to roughly 3,443 BTC
• The device had already been destroyed through standard evidence disposal
• The court found Prime waited too long and gave inconsistent accounts

Prime was convicted in 2019 for counterfeiting, identity theft and firearm offenses. Investigators recovered counterfeit credit cards, forged identification documents and electronic devices as part of a larger fraud case. Among the items seized was an orange external hard drive.

Years later, Prime argued that the hard drive contained access to approximately 3,443 bitcoin, which at current prices would be valued at more than $364 million. He sought compensation for the alleged loss, stating that federal authorities had “destroyed” the drive.

However, the appeals panel said the device had been disposed of lawfully after the conclusion of the criminal case. The judges pointed to Prime’s long delay in asserting that the device held bitcoin, as well as conflicting statements about whether he actually owned the cryptocurrency.

The panel 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 judgment.”

The decision notes that Prime waited more than four years after the initial seizure to request the return of the hard drive, during which time it had already been processed for disposal under standard evidence procedures. The court said that delay disadvantaged the government and prevented verification of the claim.

At the time of writing, BTC trades at $105,547, placing the alleged total value near $360 million.

FAQ

What did Prime claim was on the hard drive?

He said it contained private keys for about 3,443 bitcoin.

Why was the claim dismissed?

The court ruled that Prime waited too long and provided inconsistent statements about ownership.

Was the hard drive destroyed intentionally?

It was disposed of under routine evidence handling procedures after the criminal case.

Is there any path for Prime to appeal further?

He may request further review, but the appellate ruling strongly affirms the original dismissal.