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

November 6th. Lately, the U.S. Court of Appeals made a ruling that the FBI is not liable for erasing a hard drive which might contain more than 3,400 bitcoins. This is because the convicted owner of the hard drive never informed the government of their ownership of the tokens. The key figure in this case, Prelim, had previously served a prison term for identity theft. After being released in July 2022, Prelim applied to the court to have the hard drive containing bitcoins returned. Nevertheless, the FBI had already erased it in accordance with their standard procedure. Prelim claimed that this action was illegal and appealed. The judge finally stated that Prelim waited too long to file the appeal and their testimony was inconsistent, raising doubts about whether they really held bitcoins. Before reaching a plea agreement and serving a prison term in November 2019, Prelim had claimed to possess "about 3,500 bitcoins." However, after being incarcerated, Prelim changed their story. A financial disclosure report submitted to the government in February 2020 showed that they only held a few thousand dollars' worth of bitcoin. Glassnode data indicates that approximately 1.46 million BTC (nearly 7% of the total supply) may have been permanently lost. Meanwhile, Chainalysis reported in 2018 that the permanently lost bitcoins could be as high as 3.7 million, exceeding 17.5% of the total supply.