A man who lost a hard drive said to be worth £160million 10 years ago has threatened his local council with legal action if they refuse to let him dig for it.
James Howells’ ex-girlfriend accidentally threw out the drive containing 8,000 Bitcoins back in 2013. The Newport local has been battling for a decade for permission to dig up the Newport City Council landfill site on Docks Way to find the hard drive and access his coins, which he says are now worth around £162m. But despite a tireless campaign, the council have repeatedly refused Mr Howells’ requests to access the site, citing reasons including permit issues – and what they say is a lack of realistic prospect of recovering the iPhone-sized drive.
Now Mr Howells, 38, says he has assembled a legal team and has issued Newport City Council with an ultimatum; allow him access to the site or face court. In an open letter sent on behalf of Mr Howells by his legal team to the council’s head of law earlier this week, the council was accused of ignoring Mr Howells’ requests to meet and has been asked to allow him immediate access to the landfill site to look for his hard drive, which Mr Howells claims he has a legal right over. A representative from Mr Howells’ legal team said they considered the case worthwhile with “public benefit” to the people of Newport and are hoping to resolve the matter outside of the court system and see litigation as a last resort.
Speaking to WalesOnline this week Mr Howells said: “Newport City Council continues to ignore our requests for a meeting, a genuine sit-down conversation, to figure out a way forward. They continue to stonewall us. The only option left is legal action. I have three barristers [Dean Armstrong KC, Bruce Drummond and Maria Mulla] on board and we are willing to take them all the way to the High Court and Supreme Court if necessary.”
In the letter, Mr Howells’ legal team has given the council a deadline of Monday, September 18 to respond, after which Howells said he intends to begin the legal process. He claims he has a proprietorial right under UK law to the hard drive and said he cannot understand why the council won’t engage with him. “It’s ridiculous that they have not had a conversation with us about how to do this safely, without damaging the environment, at no cost to the council,” he said. “The value of the coins is still viable and will grow over time.”
In August last year Mr Howells told WalesOnline he had assembled a team of experts in finance, AI, data recovery and the environment in order to persuade the council to let them dig up the site in a way which did not impact the environment. The plans included a search facility with robotic arms, manual pickers and factory-standard machinery to sort through the waste at the landfill site to find the lost hard drive.
Mr Howells has even enlisted someone who previously looked after the Newport landfill site. He said he offered to meet the council personally and contacted its chief executive, cabinet, council leader and attempted to engage his local MP. But he says all efforts have been ignored. “I wanted to host them in a boardroom at the Celtic Manor and explain each step to them, address any concerns, about how we could do this. There was a lot of research done to build this team. It’s been ten years trying to speak to the council in a businesslike manner. Why? Why are they being so difficult? If we have to go down that [legal] route, we’ll go down there all guns blazing.”
One of the earliest to get involved in Bitcoin when it launched back in 2009, Mr Howells estimates the current value of his data at around $209m – around £162m as of Friday, September 8 – and he believes that it could grow to a billion dollars if the value rises as predicted. In previous years he has offered to give the council a cut of the value of the coins, stating previously that he wanted to “give money to the people in Newport” and “make Newport a crypto Mecca for future generations.” But after coming to the conclusion in around March this year that he had been left with little choice but to consider legal action, he said that offer no longer stands, adding: “The council is taking away from the people of Newport [by not engaging with him]. I think it is short-sightedness and incompetence.”
In past years Newport City Council has given a number of reasons for not allowing Mr Howells to dig on the landfill site on Docks Way. These include the cost and environmental impact of digging up the site, the likelihood of the device being found in working condition and the nature of the council’s permit for the site which does not allow public access. But Mr Howells said he believes he and his team can address all these concerns and that he has spent an extensive amount of time working to do so.
“We believe the excuses are just fluff. We have experts that can mitigate every single concern. People who deal with landfills for a living. These are not new techniques [his team are proposing] – it’s just about bringing them all together. I’m pretty sure they don’t have a data expert with 25 years’ experience like I do. If the hard drive is in reasonable condition, the data will be. We think there is an 80% chance of that being the case.”
While he concedes that there is a possibility that the device, a 2.5-inch laptop hard drive that is approximately the same size as an iPhone, has been damaged beyond viable use, he said he has been assured that due to the nature of the device, there is a realistic prospect that the part of it needed to recover the data might be intact. “There’s no way to estimate what the hard drive will be like when we get it,” he admitted. “We could find it and it could be cracked into a million pieces. I accept that. But we could find it and it could be stuck under something and be fine – that is just as likely. We just don’t know.”
Mr Howells, a former IT systems engineer, has put together a range of proposals over the years for digging on the site. One, estimated at around £5.5m and lasting 18 months, would involve isolating a small corner of the landfill site where he and his team believe the drive might be, and another costing around £10m and lasting up to two years involves fully digging up the site. He explained that he has secured funding from external investors for both these projects. A third, as-yet unfunded plan, involves potentially buying the landfill site from Newport City Council and selling on in the future, but he said this may cost around £25 million.
If Mr Howells does get access to the site and finds the drive, the scale of his operation means he will already get significantly less than the full amount, as he will have to divide the money between him and the considerable number of people he has recruited to help. “If we find it, it’ll be around one third for me, one third for the investors and one third for the recovery team, legal teams etc.”
Recalling the loss of the hard drive a decade ago, Mr Howells said it was discarded by an ex-partner sometime in August 2013, rather than by him directly. Today he is reluctant to put blame on anyone and said he cannot change the past, but is focused on his now decade-long quest to get back what he feels is his. “The hard drive was thrown away by my ex partner. I don’t wish to blame her, it was a complete accident,” he said. “But legally, the hard drive left my house while I was asleep without my consent. Therefore it could be considered stolen property under UK law, potentially.”
Mr Howells said he doesn’t believe there has ever been a legal case like his before. “It’s crazy. I don’t think about the valuation on a daily basis. I’ve spent ten years watching it go up, and down, and up again, without being able to spend a penny of it. What can I do about how it went down? I can’t do anything now. What I can focus on is what I can do about it now, that’s all I can focus on. If we get to the end and we are unsuccessful, then that’s that, we can relax, there’s nothing more we can do. But I’m not giving up. I equate it to the council harbouring stolen property for ten years, that’s what it’s like.”
Mr Howells said he also has concerns about a planning application for a new waste management facility near the landfill site which would be able to process, filter and recycle excavated landfill waste. According to the letter sent to the council, he is concerned that this facility would be able to recover his hard drive and the data on it.
Mr Howells still lives in Newport, in the same house he has always lived in. The same house where, on that fateful day which would consume the last decade of his life, his hard drive was tossed. “This is where I mined Bitcoin in the early days,” he said. Asked if, given what has happened, he regretted ever getting involved in the digital currency, he laughed: “Once or twice I wish I hadn’t bothered. But only one or two things could have been different and it would have been another story. A success story.” He added that he remains proud of having been a very early adopter of Bitcoin, saying: “There are not many in Wales who can say that.”
The unusual case has garnered Mr Howell a significant media coverage in recent years, both in the UK and abroad in the likes of the New Yorker. He said he has been approached for various projects including a film but said he doesn’t court attention the way some might think. “One of the directors of the Terminator series wanted to do a movie, but I turned that down. Some people say I love the attention but I don’t. I just want to dig a hole and get the hard drive back. Media is not something I particularly enjoy but it has helped me build the team I have. Without it I wouldn’t be where I am now. They [the media] have used my story and I’ve used them to prove to the council that we are a serious operation. We want to do this properly.”
Mr Howells stopped working around a year after the hard drive was lost, intent on devoting his time to retrieving his fortune – and is adamant he will pursue it until he has an answer. “This is my full time operation,” he said. “I don’t see why I should work for anyone else when I’ve got £200m buried in the ground that’s mine.”
When contacted this week regarding Mr Howells’ letter and comments, a Newport City Council spokesperson said: “Newport City Council has been contacted multiple times since 2013 about the possibility of retrieving a piece of IT hardware said to contain bitcoins, which may or may not be in our landfill site. 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 authorised to carry out operations on the site. We have been very clear and consistent in our responses that we cannot assist Mr Howells in this matter. Our position has not changed. We will be offering no further comments on this issue as it takes up valuable officer time which could be spent on delivering services for the residents of Newport.”