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A Florida man’s long battle to recover what he claimed was a $354 million Bitcoin fortune has ended in failure after a federal appeals court ruled that he waited too long to come forward and that the hard drive holding his alleged crypto keys had already been destroyed.
In a decision published Tuesday, the U.S. Court of Appeals for the Eleventh Circuit rejected the appeal of Michael Prime, who was seeking the return of an orange external hard drive seized during his 2019 arrest for counterfeiting and identity theft.
The court upheld a lower court’s ruling that Prime’s request came years too late and that his earlier denials of owning any significant amount of Bitcoin made recovery impossible.
“For years, Prime denied that he had much Bitcoin at all,” the panel of judges wrote. “Only later did he claim to be a Bitcoin tycoon.”
‘Too Late to Claim’: Court Denies Florida Man’s Effort to Retrieve Lost Bitcoin
Prime was arrested in 2019 after police discovered fake credit cards, counterfeit driver’s licenses, and firearms at his home in Hillsborough County.
Investigators also seized several electronic devices, including the hard drive that would later become the focus of his legal fight.
At the time, Prime admitted to accepting Bitcoin as payment for selling counterfeit items online but said he had already spent most of his crypto holdings.
Federal agents attempted to locate any cryptocurrency linked to Prime, conducting multiple searches in 2018 and 2019.
Those efforts failed to uncover any wallets or recovery keys. Based on Prime’s own statements that he owned “very little Bitcoin,” authorities eventually destroyed the seized storage devices in accordance with standard procedures.
Prime was sentenced in 2020 to more than five years in prison for access-device fraud, aggravated identity theft, and illegal firearm possession.
After his release in 2022, he filed a motion under Rule 41(g) to recover the hard drive, claiming it contained cryptographic keys to roughly 3,443 Bitcoin, worth over $345 million at current prices.
The district court denied the motion, ruling that the property had been “properly destroyed” and that Prime’s delay had prejudiced the government. The Eleventh Circuit agreed, citing “laches,” an equitable doctrine barring claims filed after unreasonable delay.
The judges wrote that awarding compensation “even if the Bitcoin existed” would be inequitable.
Where Does Lost Bitcoin Go, and Who Really Owns What’s Left?
Bitcoin itself is not stored on physical devices but exists on the blockchain, a shared public ledger. Hard drives and wallets only store the private keys needed to access or move the Bitcoin.
Without those keys or a backup seed phrase, the coins remain permanently inaccessible. “Lost coins only make everyone else’s coins worth slightly more,” Bitcoin creator Satoshi Nakamoto wrote in 2010.
According to blockchain analytics firms, lost Bitcoin is a growing phenomenon. A 2025 report by River Financial estimates that between 2.3 million and 4 million BTC, roughly 11% to 18% of the total supply, are permanently lost.
Around 3.8 million of those coins belong to wallets that have been inactive for over a decade.
With a circulating supply of just under 20 million BTC out of a maximum of 21 million, analysts suggest the effective usable supply may be closer to 16-17.5 million BTC.
This scarcity contributes to Bitcoin’s deflationary character. Experts say this has a subtle but lasting effect on Bitcoin’s value, tightening supply over time.
Also, some analysts describe these “zombie wallets” as a side effect of Bitcoin’s decentralized design rather than a flaw in the system.
