A U.S. court ruled that the FBI is not responsible for erasing a hard drive that may contain 3,400 bitcoins

A recent ruling by the U.S. Court of Appeals determined that the FBI is not responsible for erasing a hard drive that may contain over 3,400 bitcoins, as the convicted owner of the hard drive never informed the government of his possession of the tokens.

The case revolves around Plemm, who previously served time for identity theft. After being released from prison in July 2022, he applied to the court for the return of the hard drive containing bitcoins, but the FBI had erased it according to its standard procedures. Plemm claimed this action was illegal and appealed. The judge ultimately stated that Plemm waited too long to file his complaint and that his statements were inconsistent, raising doubts about whether he truly held the bitcoins. Before reaching a plea agreement and serving his sentence in November 2019, Plemm claimed to own "about 3,500 bitcoins." After his incarceration, Plemm changed his story, and in February 2020, his financial disclosure report submitted to the government indicated that he only owned a few thousand dollars' worth of bitcoins. According to Glassnode data, approximately 1.46 million BTC (nearly 7% of the total supply) may have been permanently lost, while Chainalysis reported in 2018 that the number of permanently lost bitcoins could be as high as 3.7 million, exceeding 17.5% of the total supply.