The 11th Circuit Court of Appeals has denied Michael Prime's motion seeking the return of nearly 3,443 Bitcoin, now valued at roughly $345 million. Prime, arrested in 2019 for counterfeiting and identity theft, claimed that an orange external hard drive seized by police contained the private keys to access the Bitcoin. However, the court ruled that his years of delay and repeated denials of ownership barred the claim under the doctrine of laches.
Circuit Judges, including Hon. Britt Grant, noted that Prime failed to mention the Bitcoin in financial disclosures at least three times before, and during his sentencing hearing, he represented owning very little Bitcoin. The government relied on these statements, abandoned its search, and destroyed the hard drive as part of standard practices after giving notice. Prime was sentenced in 2020 to over five years in prison for access-device fraud, aggravated identity theft, and illegal firearm possession.
After his release, Prime filed a motion under Rule 41(g) for the return of seized property, but the district court denied it in 2024, a decision affirmed by the Appeals Court. The judges emphasized that Prime's inconsistent statements—initially denying significant Bitcoin ownership and later claiming to be a 'Bitcoin tycoon'—made his claim inequitable. They stated that the delay prejudiced the government, as it would not have destroyed the hard drive if aware of the alleged Bitcoin.
Federal agents conducted three searches but found no crypto, private keys, or recovery seeds, and no assets were located in Coinbase accounts. The court concluded that even if the Bitcoin existed, compensation would be unfair due to Prime's inexcusable delay. The ruling highlights how lost coins, as referenced by Satoshi Nakamoto, can reduce circulating supply, but the focus remains on the legal implications of Prime's actions.
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