Key Takeaways:
A New York state court froze proceedings targeting 39,069 dormant Bitcoin wallets holding roughly 3.8 million BTC after an attorney argued the novel legal theory underpinning the case misapplies lost-property law to blockchain assets.
A New York judge halted default judgment proceedings against 39,069 dormant Bitcoin wallets worth about $285 billion after a lawyer argued the court cannot declare blockchain assets abandoned under a statute written for lost jewelry and luggage.
"The plaintiffs' theory would let anyone with blockchain analysis tools and a police station claim ownership of long-dormant wallets anywhere on the network," Ian R. Cohen, the New York attorney who filed the amicus brief, said in his May 29 filing.
The case, filed March 11 at the New York County Supreme Court under index number 153119/2026, rests on a pseudonymous plaintiff identified as Noah Doe who claims he discovered dormant wallets through an algorithm and served notice via Bitcoin's OP_RETURN field. Of 42,001 wallets initially identified, 424 moved coins during a 90-day response window and were removed. The remaining 39,069 wallets became the target of a declaratory judgment claim under New York Personal Property Law Article 7-B, the state's lost-and-found statute.
Judge Kathy J. King's June 5 stay halts any push toward an uncontested default judgment pending a hearing, preserving what Cohen's brief called "the property rights of every self-custody bitcoin holder in New York" — a question that now heads to oral argument with no date yet set.
Defendants Respond On-Chain
The legal battle has triggered a wave of on-chain activity from some of Bitcoin's oldest addresses. A wallet holding 35.55 BTC dormant since March 2011 — listed as defendant address No. 38215 in the case — moved its coins on June 2, sending 15 BTC to a new address and holding the remaining 20.55 BTC as change, per mempool.space data. Galaxy Research's Alex Thorn flagged the transaction, writing on X that the wallet's owner was "apparently not, in fact, abandoned."
A second address, 18sLgPeB9wQVrE8JoWqtKtnucbsx3Lw1m7, moved 47.26 BTC worth about $2.88 million on June 6 after 15 years of dormancy. Galaxy identified it as defendant No. 37923. A third wallet, 1CDSyXAQxro4FPUoqAQb81642ruqDsUiNp, transferred 20 BTC roughly 13 hours before the 1LwWt move, though it does not appear on the lawsuit's defendant list.
Each movement chips away at the lawsuit's central premise: that these wallets were abandoned. "Abandonment requires intentional relinquishment of ownership and an external act manifesting that intent," Cohen wrote in his brief. "Mere inactivity, no matter how prolonged, is not abandonment."
What's at Stake
The case carries implications far beyond the 39,069 named wallets. Cohen's brief warned that accepting the plaintiffs' argument would create a legal framework where any party with blockchain scanning tools could target dormant addresses under New York's lost-property doctrine — a risk for every self-custody Bitcoin holder.
The wallet list includes addresses linked in public reporting to the 2011 Mt. Gox hack and others analyzed as potentially associated with Bitcoin's genesis-era mining. The "1Feex" address, listed as John Doe No. 1, holds approximately 80,000 BTC and has been widely discussed in connection with the Mt. Gox theft. Cohen noted that a New York state-court ownership declaration over assets potentially subject to Japanese civil rehabilitation proceedings and U.S. federal forfeiture interest would risk serious legal conflict.
The court's stay means the case now heads toward a hearing with those questions on the table. Bitcoin traded near $60,654 at the time of writing, down 1.5 percent over 24 hours, according to CoinDesk data.
This article is for informational purposes only and does not constitute investment advice.
