'Newport would look like Dubai' if guy could dumpster dive for lost Bitcoin drive

To Wales now, where crypto bro sues to be allowed to excavate landfill site

Last time we met 39-year-old James Howells from Newport, Wales, he was petitioning his local council to let him excavate a garbage dump in pursuit of a lost hard drive he believes holds the key to 7,500 Bitcoin. Now he is suing the authority to force its hand.

In 2021, Newport City Council turned him down, saying: "The cost of digging up the landfill, storing and treating the waste could run into millions of pounds – without any guarantee of either finding it or it still being in working order."

That 7,500 Bitcoin (Wales Online reports it as 8,000) could have been worth as much as $7.5 million at one point in 2013, when Howells suspects he tossed the drive in "a clearout" of old IT equipment.

Nowadays, in spite of the spectacular fall of cryptocurrency exchange FTX in 2022 and a crypto winter around the same time, we're looking at a valuation of about $503 million at current rates.

Not one to let sleeping dogs lie, and with the probability of ever recovering the drive slimming each passing day, Howells has filed a claim against Newport City Council for £495,314,800 ($644 million) in damages, Wales Online reports, the sum being "the peak valuation of his 8,000 Bitcoins from earlier this year."

Seeing that the authority spent [PDF] £321.6 million ($418 million) providing services in 2022-2023 and has "24 percent of its 95 areas considered to be within the most deprived 10 percent of areas in Wales," half a billion pounds might seem steep to even the most casual observer.

However, Howells claims that the purpose of the lawsuit is not to wipe out the council's coffers and then some, but to force it into agreeing to an excavation to avoid a protracted and costly legal battle. The authority said it has refused excavation "on a number of occasions" since 2013 because it is "not possible under our licensing permit and excavation itself would have a huge environmental impact on the surrounding area."

"I'm still allocating 10 percent of the value for the council even though they have been problematic throughout," the paragon of virtue told Wales Online. "That would be £41 million based on today's rate but in the future it could be hundreds of millions. If they had spoken to me in 2013, this place would look like Las Vegas now. Newport would look like Dubai. That's the kind of opportunity they've missed."

Howells also offered more context about the nature of his Bitcoin and what happened to it. The IT engineer believes himself to be one of the first miners of the pioneering cryptocurrency, having heard about the concept on IT forums in 2009, minting "8,000" himself for "pennies' worth" of electricity to keep his laptop generating cryptographic solutions for the blockchain. The private key to access the Bitcoin was stored on a 2.5-inch hard drive in a drawer in his home office.

Come 2013, though, he found two identical HDDs during the aforementioned "clearout." One held the key, the other was blank. Howells claims he mistakenly put the Bitcoin drive in a bin bag – a big no-no for electronic waste, which should be recycled responsibly due to its environmentally harmful contents. He asked his partner to take the bags to the dump the following morning, which was refused, though he said he used the opportunity to take a mental note to check that there was nothing valuable on the drive before taking them himself. Morning came, however, and the bags had been disposed of.

The past decade has allegedly been a "full-time operation" to recover the hard drive. Howells quit his job in IT and assembled a team of investors that would leave him with 30 percent of the value of the Bitcoin, the rest to be divided between his backers, the excavators, and the council.

Howells' legal team – the same barristers representing alleged abuse victims of billionaire former Harrods owner Mohamed Al Fayed – claims that the hard drive is located in "Cell 2 – Area 2" of Docksway Landfill and believes there is an 80 percent chance of the drive's data being recoverable if found.

His lawyers accuse the council of refusing to engage with "world-renowned" experts who are offering to "eradicate dangerous waste" at the site during the excavation process, pointing out that it has "repeatedly been in breach of its permit since 2020 over levels of arsenic, asbestos, methane, and other substances."

They claim the council has "simply ignored" that 10 percent of the Bitcoin could bring "a huge and desperately needed investment in the local community." Howells added: "This could be worth billions – this is the sort of money that starts wars and Newport council won't even have a conversation about it. This is how inadequate they are."

Newport City Council said in a statement: "The council has told Mr Howells multiple times that excavation is not possible under our environmental permit and that work of that nature would have a huge negative environmental impact on the surrounding area. The council is the only body authorized to carry out operations on the site.

"The council follows a strict monitoring and reporting regime for all environmental parameters, which we report on frequently to the regulator. In common with other waste disposal authorities, exceedances of some of the levels do occur from time to time and these are logged in Natural Resources Wales' compliance reports.

"Our monitoring and reporting regime is not related to Mr Howells' claim and we believe the mention of it is nothing more than an attempt to draw attention away from a fundamentally weak claim which we are vigorously resisting. Yet again responding to Mr Howells' baseless claims are costing the council and Newport taxpayers time and money which could be better spent on delivering services."

The authority's counsel argue that it legally owns the drive because it was dumped at the landfill site. The case is due to be heard in December. ®