The U.S. Court Rules FBI Not Responsible for Wiping Hard Drive Holding Potentially 3,400 Bitcoins

BlockBeats News, November 6th. Recently, the U.S. Court of Appeals ruled that the FBI is not responsible for erasing a hard drive that may contain over 3,400 bitcoins, as the convicted hard drive owner never informed the government of their ownership of the tokens. The key figure in this case, Prelim, had previously served time for identity theft and upon release in July 2022, applied to the court to have the bitcoin-containing hard drive returned. However, the FBI had already erased it under their standard procedure. Prelim claimed this action was illegal and appealed.

The judge ultimately stated that Prelim waited too long to file the appeal, and their testimony was inconsistent, casting doubt on whether they truly held bitcoin. Before reaching a plea agreement and serving time in November 2019, Prelim had claimed to possess "about 3,500 bitcoins." However, after being incarcerated, Prelim changed their story, and a financial disclosure report submitted to the government in February 2020 showed they only held a few thousand dollars' worth of bitcoin.

Glassnode data shows that approximately 1.46 million BTC (almost 7% of the total supply) may have been permanently lost, while Chainalysis reported in 2018 that permanently lost bitcoins could be as high as 3.7 million, exceeding 17.5% of the total supply.