Six dormant Bitcoin wallets move $40 million after decade-long pause

Six Bitcoin wallets untouched since 2011-2014 moved 553.59 BTC worth $40.15 million in 10 days.

Six Bitcoin wallets dormant since 2011, 2012, and 2014 moved a combined 553.59 BTC worth $40.15 million between Aug. 16 and Aug. 26, Galaxy Research data shows.

"Every single one had moved coins onchain since the case was filed," Alex Thorn, head of research at Galaxy, said on July 8, referring to wallets named in a New York lawsuit seeking to claim dormant Bitcoin as abandoned property.

The largest single transfer was 212 BTC worth $13.66 million from a wallet dormant since Aug. 10, 2012, tagged "Noah Doe #1396 · Salomon Client Dusted." A second tagged wallet moved 150 BTC worth $11.75 million. The final transfer sent 40 BTC to Boerse Stuttgart Digital, a German crypto custody bank, at 10:54 UTC on Aug. 26.

Five of the six transfers went to addresses without known exchange links, offering no on-chain evidence the coins were sold. The moves come as a New York Supreme Court case seeks to claim 39,069 dormant addresses as abandoned property and after a Coldcard firmware exploit drained roughly $130 million starting in late July.

The Noah Doe case

The two tagged wallets connect to a suit filed by a pseudonymous plaintiff, Noah Doe, and two Wyoming entities under Article 7-B of New York's Personal Property Law, which covers lost property. The complaint targets 39,069 dormant addresses holding about 3.7 million BTC, including wallets tied to Bitcoin creator Satoshi Nakamoto and the Mt. Gox hacker. Plaintiffs served notice by sending thousands of wallets a tiny "dust" transaction with an on-chain message — Galaxy calls the tagged addresses "Salomon-dusted." New York Supreme Court Justice Kathy J. King paused the proceedings in June and blocked a default judgment before a scheduled July hearing. In July, the plaintiffs dropped 44 wallets after they became active following the filing; those addresses held 21,443 BTC when the lawsuit began, Thorn said.

Security concerns and the oldest coins

Separate concerns about hardware-wallet security may explain some activity. A firmware flaw affecting certain Coldcard devices let attackers reconstruct weak seed phrases and drain Bitcoin starting in late July; Galaxy estimated four attack waves removed about 1,816 BTC from 5,294 addresses. Coinkite, Coldcard's manufacturer, traced the problem to a March 2021 firmware change that weakened the randomness used to create seeds. Wallets established in 2011-2014 predate the flawed firmware, but owners could have imported older keys into affected devices later.

The oldest coins in the batch were bought for about $14 apiece in mid-2011 and were worth $538,000 when they moved — a 461,981 percent gain. The steepest return came from the 40 BTC sent to Boerse Stuttgart Digital, up roughly 1,535,911 percent on a $5 cost basis. For US holders, moving Bitcoin between addresses under the same person's control does not create a taxable disposal, the Internal Revenue Service states.

The pace of old-wallet reactivation has accelerated over the past six months. On Aug. 20, 28 dormant wallets moved 1,314.41 BTC worth $94.03 million, and earlier in July a wallet transferred 5,908 BTC worth about $383 million after more than eight years without activity. Whether the latest holders are consolidating into cold storage or preparing to sell, the destination of five of the six transfers — addresses with no exchange labels — suggests the coins may remain off-market for now.

This article is for informational purposes only and does not constitute investment advice.