A New York judge has temporarily paused a lawsuit seeking ownership of nearly 39,000 dormant Bitcoin wallets, putting on hold a case that could have major implications for digital asset ownership. The lawsuit has raised questions about whether abandoned cryptocurrency can be claimed through existing property laws.
As per the docket, Justice Kathy J. King halted the case ahead of a July 14 hearing, blocking the plaintiffs from seeking a default judgment while the court examines the legal basis of their claim. The dispute could become an early test of whether long-dormant Bitcoin wallets can be treated as abandoned property under New York law.
Legal theory faces growing scrutiny
The lawsuit was filed by an anonymous plaintiff known as Noah Doe alongside two Wyoming-based companies. They are asking a New York court to declare them the legal owners of thousands of dormant Bitcoin wallets.
Their argument rests on New York’s lost-property laws. The plaintiffs contend that owners who failed to respond to notices effectively abandoned their wallets, allowing ownership to pass to a finder under state law. They say they followed the required process by identifying the wallets, notifying authorities, and publishing notices.
The case gained wider attention after Sani, founder of Timechain Index, highlighted it on X. According to publicly available data, the targeted addresses hold about 3.8 million Bitcoin. At current market prices, those holdings are worth roughly $234 billion, underscoring the scale of a legal dispute that could shape how courts treat long-dormant digital assets.
“Securely held, not abandoned”
The legal challenge intensified after New York attorney and Bitcoin holder Ian R. Cohen filed a motion to appear as an amicus curiae (friend of the court) to oppose the lawsuit.
Cohen argues that New York’s lost-and-found laws apply strictly to tangible, physical items, not blockchain addresses that remain publicly visible on a distributed ledger. His proposed brief strikes directly at the plaintiffs’ abandonment theory, stating that if an original owner cannot access their assets due to a lost key or security breach, it constitutes an “involuntary deprivation of access,” not a voluntary forfeiture.
“A wallet that has been dormant for ten years, whose private key is stored on a steel plate in a bank vault, is not abandoned property,” Cohen argued. “It is securely held property.”
Furthermore, Cohen raised concerns about potential jurisdictional conflicts, noting that some of the addresses listed in the lawsuit overlap with wallets tied to the Mt. Gox collapse and other ongoing, complex legal claims.
The Great Bitcoin Dusting
Court filings show that Noah Doe used a proprietary algorithm to identify dormant Bitcoin wallets that he believed qualified as abandoned property. He later submitted wallet data to the NYPD and sent OP_RETURN messages across the Bitcoin network directing wallet owners to abandonment notices.
Galaxy Research previously dubbed the effort the “Great Bitcoin Dusting.” The campaign targeted roughly 41,000 wallet addresses holding millions of Bitcoin and drew attention for its unusual attempt to contact long-inactive holders through on-chain messages.
However, recent blockchain activity has complicated the plaintiffs’ argument. Several wallets named in the lawsuit have moved funds in recent days, suggesting that at least some owners still control their assets. One address transferred 47.26 BTC on June 6 after nearly 14 years of inactivity. Another wallet, dormant since 2011, moved 35.55 BTC earlier in the month.
Meanwhile, attorney Ian Cohen has raised concerns about potential conflicts with other legal proceedings. He noted that some addresses listed in the lawsuit overlap with wallets linked to the Mt. Gox collapse and other ongoing claims. As a result, he argues that competing ownership disputes could create jurisdictional challenges for the New York court.
The plaintiffs have until July 7 to respond to Cohen’s motion. Until then, the court’s stay blocks any effort to secure a default judgment. The July 14 hearing will now serve as an early test of whether decades-old property laws can support claims over dormant cryptocurrency holdings.
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