A federal appeals court has ruled that the Federal Bureau of Investigation bears no liability for erasing a hard drive containing approximately 3,400 Bitcoin, valued at roughly $345 million at current market prices. The decision comes after the device’s owner, previously convicted on criminal charges, failed to disclose his cryptocurrency holdings to government authorities during legal proceedings.
The court determined that without proper notification from the defendant regarding the digital assets stored on the hardware, the FBI could not be held responsible for the permanent data loss during standard evidence handling procedures. Legal experts note this ruling establishes significant precedent regarding government accountability for seized digital property when asset disclosure requirements aren’t met.
The case highlights ongoing challenges in digital asset preservation within law enforcement protocols, particularly when dealing with concealed cryptocurrency holdings. The judgment reinforces that defendants must formally declare digital assets during legal processes to establish government responsibility for their safeguarding. This decision comes amid increasing scrutiny of law enforcement protocols for handling cryptocurrency evidence in criminal investigations across multiple jurisdictions.
