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One of the most unusual and high-value Bitcoin-related lawsuits in U.S. history has officially come to an end. The U.S. Court of Appeals for the Eleventh Circuit has rejected a $364 million compensation claim filed by Michael Prime, a convicted fraudster who accused federal agents of destroying a hard drive allegedly containing thousands of Bitcoin.
In a ruling issued on November 4, 2025, the appellate court affirmed a previous decision from the Middle District of Florida, which had already dismissed Prime’s complaint earlier this year. The court found that his demand came years too late and lacked credible evidence.
The $364 Million Bitcoin Claim
Michael Prime, convicted in 2019 on charges of counterfeiting, identity theft, and firearms violations, filed the extraordinary claim, alleging that government agents had destroyed a device holding the cryptographic keys to 3,443 Bitcoin—valued today at approximately $364 million.
According to Prime, during his criminal investigation, law enforcement authorities had seized an orange external hard drive as evidence. He later asserted that the device contained private keys granting access to his Bitcoin holdings, and its destruction amounted to the unlawful seizure of property.
However, both the lower and appellate courts dismissed these claims as “speculative” and “unsubstantiated.”
Court: “Even If the Bitcoin Existed — That’s a Big If”
The Eleventh Circuit judges issued a strongly worded opinion rejecting Prime’s arguments, emphasizing his years of delay and contradictory statements about ownership of the cryptocurrency.
“Even if the Bitcoin existed — and that’s a big if — awarding Prime an equitable remedy here would be inequitable,” the court stated. “His delay in claiming a right to the Bitcoin and requesting its return bars his suit.”
The court found that Prime’s long silence after his conviction placed the government in an unfair position, as the evidence he claimed ownership of had already been lawfully destroyed in accordance with standard evidence disposal procedures.
Destroyed Evidence and Legal Dead Ends
Court records reveal that Prime’s case began unraveling soon after his conviction. Federal investigators had found forged identification documents, counterfeit credit cards, and numerous electronic devices linking him to a complex fraud operation.
The alleged Bitcoin-containing hard drive was part of that evidence collection. However, it was later destroyed following standard retention timelines, years before Prime attempted to claim ownership.
The Eleventh Circuit agreed with the lower court that the destruction was legally justified, as no timely ownership claim had been filed. The court further cited the doctrine of laches, a legal principle preventing plaintiffs from bringing claims after an unreasonable delay that disadvantages the opposing party.
In this case, the court concluded that Prime’s years-long silence rendered his claim invalid.
A Pattern of Contradictions
The judges also noted that Prime had repeatedly contradicted himself in sworn statements. At various times, he alternately denied and asserted ownership of the hard drive and its alleged contents.
This inconsistency, the court ruled, “undermines the credibility of his entire claim.” Without solid proof that the device contained cryptocurrency — or even that he had access to such funds — the court determined there was no factual or legal basis for compensation.
Government Not Liable for Destroyed Device
The appeals panel found that federal agents acted within lawful boundaries, as the evidence in question had already been deemed forfeitable due to Prime’s criminal activities.
By the time he submitted his recovery request, over four years had passed since the initial seizure. The ruling stated that even if the device had contained Bitcoin, Prime’s failure to assert timely ownership rights meant the government bore no liability for its loss.
Bitcoin’s Value Adds a Layer of Intrigue
At the time of the alleged destruction, Bitcoin was worth a fraction of today’s price. However, with Bitcoin currently trading around $105,749 according to CoinGecko, the total value of the purported 3,443 BTC now stands near $364 million — turning what might have been a minor property dispute into a headline-grabbing case.
Despite the staggering figure, the court’s ruling makes clear that without concrete evidence or consistent testimony, Prime’s claim holds no legal ground.
A Cautionary Tale for Crypto Holders
The decision serves as a reminder of the legal complexities surrounding digital asset ownership and evidence handling. Courts require verifiable proof of ownership, including access to private keys and transaction records — not just assertions of lost crypto wealth.
Legal experts note that the case underscores the importance of maintaining secure, verifiable records of digital assets and acting promptly in any dispute involving government seizure.
While the verdict brings closure to Prime’s claim, it also highlights how Bitcoin’s rising value continues to spark unusual and high-stakes legal battles across the globe.
