{"id":57174,"date":"2025-11-07T02:01:31","date_gmt":"2025-11-07T02:01:31","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=57174"},"modified":"2025-11-07T02:01:31","modified_gmt":"2025-11-07T02:01:31","slug":"345-million-in-bitcoin-gone-but-fbi-isnt-at-fault-judges-say","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=57174","title":{"rendered":"$345 Million In Bitcoin Gone \u2014 But FBI Isn\u2019t At Fault, Judges Say"},"content":{"rendered":"
\n

The US Court of Appeals for the Eleventh Circuit has affirmed a district court\u2019s refusal to award a Florida defendant the value of roughly 3,443 bitcoin\u2014now \u201cworth over $345 million\u201d\u2014after the government destroyed an external hard drive he belatedly claimed held the keys, holding that the equitable doctrine of laches bars relief because he spent years denying he owned meaningful cryptocurrency. The published opinion, authored by Judge Elizabeth \u201cLisa\u201d Branch Grant and joined by Judges Jill Pryor and Marcus, leaves intact the lower court\u2019s ruling that the United States cannot be compelled to replace the bitcoin, even assuming the drive ever contained it.<\/p>\n

FBI Not To Blame For 3,443 Bitcoin Hard Drive Wipe<\/h2>\n

The case, United States v. Prime, No. 23-13776<\/a>, arose from a 2019 arrest that uncovered extensive counterfeiting and identity-theft paraphernalia. Michael Prime ultimately pleaded guilty to access-device fraud, aggravated identity theft, and illegal firearm possession. In the investigation\u2019s early days, agents tried and failed three times to locate cryptocurrency tied to his activities under federal warrants; by sentencing in June 2020, Prime and his counsel had walked back earlier references to thousands of bitcoin, representing instead that his remaining crypto was trivial. The government proceeded accordingly.<\/p>\n

As Judge Grant summarized, Prime \u201cat least three times\u201d represented he owned \u201cvery little bitcoin,\u201d and after release he still did not identify any device as holding valuable keys when he sought the return of property. The government followed its \u201cordinary practices,\u201d wiping devices it could after notice; the rest\u2014including the orange external drive at issue\u2014were destroyed. \u201cOnly later did Prime claim to be a bitcoin tycoon<\/a>,\u201d the court wrote. \u201cBy then it was too late.\u201d<\/p>\n

Although headlines have centered the FBI, the record shows it was the US Secret Service that contacted Prime in mid-2022 offering to wipe and return certain devices if he provided passwords. He asked for a pickup time, then filed pro se motions instead; none of those filings mentioned bitcoin or a hard drive. The drive was later destroyed with other electronics because Prime refused to cooperate in removing contraband data.<\/p>\n

The Eleventh Circuit underscored causation and prejudice: \u201cWe have little difficulty concluding that the government would not have destroyed the hard drive<\/a> if it had thought that it contained millions of dollars in bitcoin.\u201d With the drive gone, \u201cthe government cannot return it,\u201d and to the extent the bitcoin ever existed\u2014\u201cand we have our doubts\u201d\u2014ordering the United States to \u201cfind and hand over almost 3,443 replacement bitcoin\u201d would be prejudicial \u201cnow to the tune of over $345 million.\u201d<\/p>\n

The panel was openly skeptical of Prime\u2019s attempts to reframe his disclosures. He argued, for example, that when he reported \u201c$200 to $1,500 in bitcoin\u201d in February 2020, he meant the then-market price of a single bitcoin, not his holdings. \u201cWe don\u2019t buy it,\u201d the court wrote, noting that in February 2020 BTC traded between \u201cabout $8,500 and $10,500\u201d and that Prime had promised \u201ccomplete, accurate and truthful\u201d asset disclosures encompassing any asset in which he had \u201cany interest\u201d or control. The opinion quotes defense counsel\u2019s own admission at sentencing that the original claim to \u201csome great amount of bitcoin\u201d was \u201cnot supported by the evidence.\u201d<\/p>\n

Having affirmed on laches, the Eleventh Circuit did not reach broader questions, such as whether any BTC\u2014if it existed\u2014would have been forfeitable. The court also noted Prime forfeited any challenge to the factual finding that the drive was destroyed by failing to raise it below.<\/p>\n

The narrow holding is that equitable relief is unavailable where a claimant\u2019s multi-year denials induced the government to stop searching for assets and to process seized electronics in the ordinary course\u2014conduct the panel repeatedly tied to his non-cooperation and delay rather than to any governmental bad faith. As Judge Grant summarized the district court\u2019s bottom line, \u201claches barred his bitcoin request. We agree and affirm.\u201d<\/p>\n

At press time, BTC traded at $102,825.<\/p>\n

\"Bitcoin<\/div>\n","protected":false},"excerpt":{"rendered":"

The US Court of Appeals for the Eleventh Circuit has affirmed a district court\u2019s refusal to award a Florida defendant the value of roughly 3,443 bitcoin\u2014now \u201cworth over $345 million\u201d\u2014after the government destroyed an external hard drive he belatedly claimed held the keys, holding that the equitable doctrine of laches bars relief because he spent […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-57174","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/57174","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=57174"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/57174\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=57174"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=57174"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=57174"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}