A federal appeals court has rejected a Florida man’s attempt to recover more than $354 million worth of Bitcoin he claimed was lost when authorities destroyed a hard drive seized during his 2019 arrest for counterfeiting and identity theft.
In a ruling published Tuesday, the Eleventh Circuit upheld a lower court’s decision denying Michael Prime’s motion for the return of property, saying he waited too long to make his claim and that the delay left the government unable to return the destroyed hard drive.
“For years, Prime denied that he had much Bitcoin at all. And Bitcoin was not on the list when he sought to recover missing assets after his release from prison,” circuit judges wrote in the appeal.
It was “only later” that Prime claimed “to be a Bitcoin tycoon,” they added.
The court said Prime had repeatedly told investigators, probation officers, and a sentencing judge that he owned little or no crypto, contradicting later claims that he held “close to 3,443 bitcoin.”
Federal agents, relying on his early statements, ended their search for Bitcoin and later destroyed the seized devices, including the orange hard drive at the center of the case.
Prime, who was sentenced in 2020 to more than five years in prison for access-device fraud, aggravated identity theft, and illegal firearm possession, claimed after his release that the hard drive contained the cryptographic keys to his lost Bitcoin.
He filed a motion under Rule 41(g), which lets defendants seek the return of seized property after a case ends. A district court denied it in 2024, ruling the devices were “properly destroyed” and that Prime’s years of denial made his claim too late.
The Eleventh Circuit agreed in its ruling, saying Prime’s “inexcusable delay” had “prejudiced the government” and that compensation would be inequitable “even if the Bitcoin existed.”
Lost coins
Bitcoin itself isn’t stored on a hard drive; it exists on a blockchain, a public ledger shared across thousands of computers. What can be stored on a hard drive are the private keys or wallet files that let someone access and spend Bitcoin linked to their addresses.
Without those keys, the Bitcoin is still presumably out there, but effectively unreachable, since ownership can’t be proven or transferred.
“Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone,” Satoshi Nakamoto, pseudonymous creator of Bitcoin, wrote in 2010.
A 2025 report from Bitcoin-only financial institution River Financial estimates that between 2.3 million and 4 million BTC, representing between 11% to 18% of the total supply, are permanently lost.
About 3.8 million BTC are linked to wallets that have been inactive for over a decade, with around 19.8 million coins mined out of a hard cap of 21 million. River Financial estimates the effective circulating supply is likely between 15.8 million and 17.5 million BTC.