Florida Man’s $354 Million Bitcoin Claim Dismissed by Court of Appeals for Stretching the Truth, Being Too Slow. Michael Prime’s tardy and sporadic pleadings led him to be pushed out of 3,443 Bitcoins that were worth more than $350 million at the time.
A federal appeals court has denied a Florida man’s bid to hold the government liable for turning his life upside down in its unsuccessful quest to crack into what could have been a $354 million Bitcoin fortune. The U.S. Eleventh Circuit, in a decision in March, agreed with the lower court’s ruling that Michael Prime’s years-long delay and inconsistent interviews with investigators warranted denial of his request under Rule 41(g) to recover his business property.
Background: From Arrest to Bitcoin Redemption
• 2019 Arrest and Investigation
— Michael Prime yielded himself to the authorities on a number of charges, including access-device fraud, aggravated identity theft and unlawful possession of firearms.
— He repeatedly told agents in interviews that he owned little if any cryptocurrency. Relying on those representations, the investigators stopped searching and wiped out some devices that had been seized — including an external hard drive that Prime would later argue contained his Bitcoin keys.
• Imprisonment and Changing Story
– Prime spent more than five years in federal prison.
– After being released, he changed his story again, now claiming the hard drive that was destroyed contained cryptographic keys to a wallet with 3,443 Bitcoins in it — roughly valued today at $354 million.
Rule 41(g) Explained
They can file petitions under Federal Rule of Criminal Procedure 41(g) to have property that was taken during a criminal investigation returned. However, courts consider:
Timeliness of the request
Prejudice to the government
(A) Credibility and Consistency of the Claimant’s Statements
Court Decision: Delay and Inconsistency are Fatal
• District Court Decision, Prime filed its Rule 41(g) motion in 2024, after the devices had been destroyed. The “inexcusable delay” in his case and inconsistent accounts, the court found, prejudiced the government, and it rejected his motion.
• Eleventh Circuit Affirmation
— The appeals court concurred that it would be “inequitable” to award Prime any value of the coins, even assuming they did exist.
– The ruling emphasizes how late such inconsistent claims are unable to support recovery of digital assets.
Key Takeaways for Cryptocurrency Holders
Move Quickly: Unreasonable delay in certain cases can provide a defense of laches, which can result in untimely claims being precluded.
Be Truthful: Contradictory comments to the police could result in evidence lost and potential legal claims destroyed.
Protect Your Keys: Cryptocurrency ownership is often tied to tangible media; keep backups in secure places.
Be aware: Rule 41(g) petitions exist but have stringent filing deadlines especially after guilt of a crime.
Implications for Future Crypto Litigation
Alongside the rising tide of digital assets and law enforcement, courts will demand claimants to put forward timely, believable and well-documented claims. Those who mislead investigators or take years to claim ownership may face permanent forfeiture.
Conclusion
Michael Prime’s effort to regain a cache of Bitcoin that could have been worth millions of dollars floundered over procedural issues: a cautionary tale for anyone who controls digital currency. Clear, prompt communication with law enforcement — and secure copies of wallet keys — are crucial for protecting your rights in cryptocurrency-related battles.
