Court Rejects Suit Over FBI Bitcoin Wipe of 3,400 BTC Drive
Michael Prime sued the FBI in 2022 after agents erased his hard drive holding 3,400 BTC private keys during routine evidence handling. He had initially reported owning only $200–$1,500 in Bitcoin, even though BTC traded above $10,000 in 2020. An Eleventh Circuit panel ruled the FBI Bitcoin wipe was a standard procedure and found the agency not liable. The court noted Prime’s delayed claim and inconsistent disclosures and dismissed his suit as inequitable. The case shows how an FBI Bitcoin wipe can render crypto assets irrecoverable and stresses the risks of lost Bitcoin. Glassnode data estimates up to 1.46 million BTC are permanently inaccessible. Traders should strengthen custody practices and backup private keys to prevent similar legal or forensic losses.
Neutral
While the court ruling confirms no liability for the FBI, it does not directly affect Bitcoin’s market supply or demand. The decision highlights the risks of lost Bitcoin but does not change circulating supply, as the 3,400 BTC were already removed by erasure. Traders may revisit custody practices, but the ruling itself is unlikely to drive significant buying or selling pressure. Historically, legal clarifications without broader regulatory shifts tend to have neutral price impacts. Therefore, this news should have a neutral effect on BTC in both the short and long term.