New York judge suspends ownership lawsuit of nearly 40k dormant Bitcoin wallets! Hearing in July to decide whether to accept the petition

New York Supreme Court Justice Kathy J. King signed an order on June 4th to pause a lawsuit seeking ownership of 39,069 dormant Bitcoin wallets. The case, filed anonymously by plaintiff Noah Doe, invokes New York's "Lost and Found Law" claiming ownership of approximately 3.8 million bitcoins valued at up to $234 billion. Attorney Ian R. Cohen submitted an amicus brief questioning the legal validity of the lawsuit, and a hearing will be held on July 14th to decide whether to accept the brief.
(Background: Satoshi Nakamoto becomes the world's 11th richest person, surpassing Buffett and Hsu… Bitcoin worth $120 billion dormant for 16 years)
(Additional context: Japan proposes amending laws to classify cryptocurrencies as "quasi-securities financial products," lowering income tax, and allowing spot Bitcoin ETFs)

Table of Contents

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• Anonymous plaintiff invokes Lost and Found Law, targeting 3.8M BTC
• Targeted wallets include Mt. Gox hacker addresses and wallets from Satoshi's era
• Attorney Cohen presents seven legal challenges
• On-chain wallets begin moving: dormant coins from 2011 awaken
• If the plaintiff wins, potential impacts on the Bitcoin ecosystem

On June 4th, New York Supreme Court Justice Kathy J. King signed an order to stay the proceedings in the case titled ABC Company, XYZ Company, and Noah Doe v. John Does 1-39,069 (Case No. Index No. /2026). The order was publicly released on June 5th, freezing any procedures toward a default judgment until a hearing on July 14th, where a key amicus brief will be considered.

The anonymous plaintiff invokes Lost and Found Law, targeting 3.8M BTC

Plaintiff Noah Doe (pseudonym), a New York resident, claims to have developed an algorithm capable of identifying dormant Bitcoin wallets showing security vulnerabilities. According to the complaint, between December 2024 and April 2025, Doe repeatedly stored lists of wallet public key addresses on USB drives and submitted them to the 17th Precinct of the New York City Police Department. He then instructed a cybersecurity expert to send notifications via OP_RETURN messages to each wallet, guiding wallet holders to a website where they could prove within 90 days that the wallet was not abandoned.

Of the initial 42,001 identified wallets, 424 responded on-chain and were removed from the list. The remaining 39,069 wallets, estimated by Galaxy Research to hold about 3.8 million bitcoins, are valued at roughly $234 billion to $293 billion at current prices, forming the basis of the lawsuit.

The plaintiff cites Article 7-B of the New York Personal Property Law, commonly known as the "Lost and Found Law," asserting that dormant wallets qualify as "lost property" under law. Under this legal theory, if the original owner does not claim rights within a statutory period, ownership can transfer to the discoverer. However, this law has never been applied to digital assets in court.

Notably, the complaint values each wallet at less than $10, reasoning that without private keys, assets cannot be recovered. Galaxy Research counters that the wallets listed hold an average of 97.25 BTC, worth about $6 million.

Targeted wallets include Mt. Gox hacker addresses and wallets from Satoshi's era

Among the defendant addresses, the first, "1Feex," has long been associated with the 2011 Mt. Gox exchange hack, holding approximately 79,957 BTC. The repayment process for Mt. Gox is ongoing in Japan, meaning the same assets could be subject to both Japan’s civil rehabilitation proceedings and ownership claims in a New York court, creating a serious jurisdictional conflict.

Galaxy Research further notes that about 21,900 addresses (totaling roughly 1 million BTC) exhibit characteristics of the Patoshi pattern from Satoshi’s era, possibly linked to the Bitcoin creator’s wallet activity. Many of these addresses use outdated Bitcoin address formats vulnerable to quantum computing attacks.

Additionally, the case has experienced a judge recusal. Acting Judge Emily Morales-Minerva recused herself on March 23rd citing ethical conflicts, as she was asked to rule on matters partially decided by another judge within the same jurisdiction.

Cohen presents seven legal challenges

On May 29th, New York attorney Ian R. Cohen filed a Proposed Order to Show Cause and an amicus curiae brief (NYSCEF Doc. No. 33). Cohen, a Bitcoin holder himself, submitted the brief as an independent third party, not representing any party, systematically challenging the plaintiff’s legal basis from seven perspectives.

His core argument is: The New York Lost and Found Law applies to tangible, physically retrievable objects, whereas Bitcoin exists on a public blockchain accessible to anyone, and therefore has never been "lost." "Someone scanning the public ledger with an algorithm is not a 'discoverer' in the legal sense," Cohen writes in the brief. Bitcoin cannot be physically delivered to law enforcement for safekeeping, and "dormant does not mean abandoned."

Cohen further states: "Abandonment requires the owner to intentionally relinquish ownership and demonstrate that intent through external acts. Mere inactivity, regardless of duration, does not constitute abandonment."

He also cites the 2022 amended New York Abandoned Property Law, which explicitly directs unclaimed virtual currencies to the state comptroller’s office (escheat), rather than to private parties or Wyoming LLCs.

Regarding due process, Cohen challenges the plaintiff’s service method, which relies solely on OP_RETURN messages and global press releases, arguing this does not constitute constitutionally adequate notice, especially for deceased owners, non-English speakers, or wallets with outdated address formats that cannot receive such messages. He also questions jurisdiction, noting that Bitcoin has no recognized "legal situs" in New York, and most wallet holders are almost certainly non-residents.

Cohen directly quotes the core motto of the Bitcoin community: "Not your keys, not your coins."

On-chain wallets begin moving: dormant coins from 2011 awaken

During the lawsuit, on-chain data shows multiple targeted dormant wallets starting to move funds. After the blockchain notification in 2025, 339 wallets responded on-chain and transferred assets.

On June 6, 2026, Galaxy Research reported that address #37,923 in the defendant list (18sLgPeB9wQVrE8JoWqtKtnucbsx3Lw1m7) moved 47.26 BTC (worth about $2.88 million). This address last moved on June 17, 2011, over 15 years ago. Galaxy Research director Alex Thorn noted on X: "More of the 2011 coins claimed as 'lost' by Noah Doe are awakening and moving on-chain."

On June 2nd, another wallet dormant since March 2011 moved 35.55 BTC, becoming one of the earliest addresses to show on-chain activity after being named in the lawsuit. Each such movement undermines the plaintiff’s core claim: if the wallet owner has truly died or permanently lost the private key, these coins should not be moving; but the movements suggest the owner or an informed party is still actively controlling the private keys.

If the plaintiff wins, potential impacts on the Bitcoin ecosystem

The implications extend well beyond the courtroom. If Noah Doe’s legal theory gains court support, anyone with blockchain analysis tools and access to law enforcement could potentially claim ownership of any long-dormant Bitcoin wallet on the network. Cohen’s brief explicitly warns of this risk, cautioning that acceptance of the plaintiff’s argument could threaten the property rights of every self-custodied Bitcoin holder in New York.

Regarding cross-jurisdictional conflicts, Cohen points out that a New York court issuing ownership declarations over assets potentially involved in Japan’s civil rehabilitation process (Mt. Gox) and U.S. federal forfeiture proceedings could trigger serious legal clashes.

The plaintiff must respond to Cohen’s brief by July 7th. The hearing on July 14th will determine whether this case will see its first meaningful opposition.