FBI prevails over convicted fraudster in $345M destroyed Bitcoin dispute

A convicted identity thief has lost his appeal against Uncle Sam after claiming federal agents destroyed a seized hard drive containing cryptocurrency worth more than $345 million. Michael Prime sought to recover his belongings from police custody following his release from prison, including a bright orange external hard drive …

[Like a badger]

At a time when so much news is negative

This bought a broad smile to my face. What a wazzock.

[UCAP]

Re: At a time when so much news is negative

Definitely 7 cylinders short of a V8.

[Bebu sa Ware]

Re: At a time when so much news is negative

> Definitely 7 cylinders short of a V8.

And the timing doubtless, retarded.

Certainly under par, even sub·Prime.

[BartyFartsLast]

Maybe he could team up with the fool in the UK who's trying to buy a landfill?

They could sit and grumble at each other.

[Anonymous Coward]

I’m sure that long had a landfill bulldozer over it.

[tmTM]

At least his Bitcoin did exist at one point.

[BartyFartsLast]

Was he actually able to prove that? (Genuine question)

[Anonymous Coward]

A con man trying one last con on the courts !!!

Nice try but not good enough !!!

:)

[JimmyPage]

I wonder if they will end up

in a Welsh landfill ?

[rwill2]

I wonder why they wiped his drives

Sad ... I mean if they couldn't find any evidence why wipe his drives, OK a criminal but he lost photos and other digital assets forever too !

[LBJsPNS]

Re: I wonder why they wiped his drives

Standard procedure before disposing of assets like drives. It's either that or take a sledge hammer to them.

[Anonymous Coward]

Re: I wonder why they wiped his drives

yeah, returning isn't the same as destroying.

[DS999]

Re: I wonder why they wiped his drives

They want to see what is on the drive before returning it to him. Otherwise they could be returning ill gotten gains, blackmail material, child porn, evidence of other crimes etc. He refused to provide them what they needed to access it, and it is left as an exercise for the reader why. So if they can't look at everything on it that means they can't return it to him, and it doesn't do them any good to store it forever if they can't access it so the only alternative is to dispose of it in a way that insures that if it does contain e.g. blackmail material no one else can ever get ahold of that.

If he lost photos and other innocent stuff maybe he should have kept it on a different hard drive from the one he used for criming! But I didn't see him complaining about that, he was complaining about all the bitcoin it contained. If that was ALL it contained he could have given them access, and presuming those were not proceeds of a crime but coins he'd mined (which they could tell if they had access, via looking at the chain and seeing they had only ever been in his wallet since they were mined) they would have returned it to him with those bitcoin intact.

[vtcodger]

Re: I wonder why they wiped his drives

But if I read the article right, the Feds looked at the drives. (Apparently they weren't encrypted?) They found no crypto-currency. So they know what's on them. I have a bit of trouble seeing the where the right to destroy the content comes from. There are, or at least are supposed to be, limits to government reach without cause, Right?

[Like a badger]

Re: I wonder why they wiped his drives

Bloke's a knob end and a convict, I'm entirely comfortable with the authorities trashing his "property". I wouldn't worry too much about this one's rights.

[DS999]

Re: I wonder why they wiped his drives

The drives may not have been encrypted but some of the contents could have been.

I have a bit of trouble seeing the where the right to destroy the content comes from

If they are not legally bound to return them to him, because he's not providing information they need to access them, not being truthful about what is on them, whatever, then what should they do? Be required to store them forever, or at least until he dies, in case someday he meets the conditions for their return?

[doublelayer]

Re: I wonder why they wiped his drives

Perhaps the better question is why they aren't legally bound to return them. The only options presented according to the article were giving them access and getting wiped devices back or not giving them access and having the devices destroyed. Either way, the person wouldn't get access to the data on the drives, which makes sense if it was criminal, but most of it probably wouldn't be.

If we're only answering the question of what should happen if there's no requirement to return property, then it's a really easy question to answer, but it's easy because it's an almost entirely meaningless question because the only value lost in the case is a years-old hard drive which is relatively cheap. The important question about data which might be more valuable is one that we should consider, both from the perspective of what the current law is and what we think the law should be. I think we can both recognize that the data stored on a drive can be valuable, either objectively like cryptocurrency* or subjectively like sentimental photos, code that took a long time to write but nobody else cares about, etc. We should decide what rights suspects or criminals have to maintain access to this.

* Even though I am quite certain that the cryptocurrency claimed in this case never existed. This criminal doesn't have to be telling the truth for there to be a potentially big problem with treatment of seized storage devices.

[An_Old_Dog]

Look Past the Surface

Most people are happy when a bad guy gets his dose of poetic justice, but look past the surface.

People store all sorts of legal, financial, and personal documents and media files on electronic media.

If the government raids a suspected crime-committing business and seizes all the company's paper documents, do they burn all those documents before "returning" them?

No.

The government's assertion that encrypted file X could be Bad Thing Y is not sufficiently-logical justification, because anything could be anything.

That last handwritten letter from the perp's mother, sent just before she died, could be the coded plans for Russia to join forces with Canada, and militarily invade the U.S. from the Great White North, to smash the Empire of Starbucks and consequently paralyze the thinking process of USAian government and business leaders, so that in turn, Putin can do as he likes in Ukraine without US interference, and Canada can shut down all the US' Shari's, McDonald's, Wendy's, Burger King, Krispy Kreme, and Dunkin' Donuts stores, replacing them with Tim Hortons.

But that's probably not the case, so don't burn the letter, right? Same thing with wiping the hard drive.

If there is credible supporting evidence, not just some analyst or district attorney's spinning a tale from their ass-gas, then yes, investigate the hell out of that letter (or hard drive).

Lacking such evidence, wiping media seized in a warranted (meaning, "approved by a legally-obtained search warrant") search is just evil vindictiveness and government overreach.

[gnasher729]

Re: I wonder why they wiped his drives

“ Perhaps the better question is why they aren't legally bound to return them. ”

There is this thing called “backups”. If I had 345 million worth of bitcoin, guess how many backup copies I would have.

[doublelayer]

Re: I wonder why they wiped his drives

When you're being investigated for a crime, the investigators will want all of your backups to make sure they are indeed all backups rather than decoys, one of which contains the evidence they're looking for. If they succeed at getting all of them, then what happens to one copy is what happens to all copies. If they don't, it means you've hidden evidence from them which can be a separate crime. Do you see now why it's a question worth asking?

Although I do agree with you in the limited sense that the lack of backups is one reason I don't believe this particular criminal actually had any cryptocurrency. I have other reasons to think that too. That doesn't change the general case being a question we should have better answers to.

[Brave Coward]

Only solution left for Michael P.

Get a job at Amazon.

[Ken Y-N]

But Bitcoins live in the blockchain, not on his hard disk

I suppose it means that his passwords/password manager lived on that drive, so without access to that he cannot recover his stash.

[mark l 2]

The feds may have looked in the drive and not found a crypto wallet, but if the guy just stored this private key in a text file they may have over looked it?

But if you had $345M in crypto currency would you trust having one place for it to be stored? I know i certainly wouldn't, i would have a printed copy of the private key as well as several digital copies stored on different devices. So either the guy was a moron relying on one hard drive as his only means to recover hundreds or millions of dollars or or his talking BS and the crypto never existed in the first place.

Well i guess there is a third option and that is that the feds did find his crypto wallet and some officers are now sunning it up on a tropical island after shredding his hard drive.

[Anonymous Coward]

perhaps

they didn't wipe the drive and instead matey boy leader of FBI , was hallucinated by the orange drive and thought I'll send them quietly and swiftly to his orangutan mate at the helm and add a tiny bit more to his net worth ?

[An_Old_Dog]

Returning Only "Some" of his Drives

The Secret Service sent letters to Prime after his release, saying he could have some of his devices back, although they would be wiped ...

Why only "some" of his drives, and not all of them?

Was the Secret Service going to play "eenie-minie-moe" to determine which drives they'd keep and which they'd return after wiping them?