A New York judge has halted proceedings in a lawsuit seeking ownership of 39,069 dormant Bitcoin wallets, delaying any attempt to secure a default judgment before a July 14 court hearing.
Summary
- A New York judge has paused a lawsuit seeking ownership of 39,069 dormant Bitcoin wallets and blocked any move toward a default judgment before a July hearing.
- The complaint argues that abandoned property laws could apply to self-custodial Bitcoin wallets, including addresses linked to Satoshi-era holdings and the Mt. Gox hack.
- An attorney seeking to appear as amicus curiae has challenged the plaintiffs’ legal theory, setting up a debate over whether dormant blockchain assets can be claimed under existing New York law.
According to court filings made public on June 5, New York Supreme Court Justice Kathy J. King signed an order to show cause on June 4 that stays all further proceedings related to the plaintiffs’ request for a declaratory judgment.
The order specifically blocks any application for an inquest or default judgment until oral arguments are heard on July 14 at the New York County courthouse.
Court records show King removed the phrase “and determination” from the standard stay language, leaving the case paused until the scheduled hearing rather than until a later ruling is issued.
A separate order filed the same day found an earlier request for injunctive relief to be moot, with the court citing the plaintiffs’ First Amended Complaint filed on May 1.
Challenge to dormant wallet ownership claim gains time
The lawsuit, filed under the caption ABC Company, XYZ Company, and Noah Doe v. John Does 1-39,069, seeks a court declaration that the plaintiffs legally own thousands of dormant Bitcoin addresses under New York Personal Property Law Article 7-B, the state’s lost-and-found property statute.
Filed on May 1 through Brooklyn law firm Lewis & Lin LLC, the complaint argues that plaintiff Noah Doe discovered a security vulnerability in October 2024 that allegedly left certain wallet owners permanently unable to access their Bitcoin.
According to the complaint, Doe developed a proprietary algorithm to identify wallets that he believes meet the legal standard for abandonment, reported the findings to the NYPD, and spent more than a year attempting to locate the owners.
The filing further states that Doe assigned ownership rights in all but 18 wallets to ABC Company in December 2025, after which ABC Company transferred a 17.7% interest to XYZ Company.
Public attention around the case increased after Sani, founder of blockchain analytics platform Timechain Index, highlighted the lawsuit on X in May. Sani estimated that the listed wallets held roughly 3.7 million BTC, worth about $285 billion at the time.
Separately, Galaxy Research estimated that 39,069 addresses named in the lawsuit contained approximately 3.8 million BTC. Using Bitcoin prices available when its analysis was published in May, Galaxy valued those holdings at roughly $293.5 billion.
Amicus filing challenges legal theory
Among the addresses identified in the complaint are the “1Feex” wallet, which public reporting has long linked to the 2011 Mt. Gox hack, and wallets that Galaxy Research said display Satoshi-era “Patoshi” mining patterns commonly associated with Bitcoin’s creator. The complaint also references the “12c6D” address, another wallet widely associated with Satoshi Nakamoto.
The plaintiffs’ valuation approach differs significantly from those estimates. According to the complaint, an unnamed expert assessed each wallet at less than $10 because of the uncertainty involved in recovering any value from the assets.
Meanwhile, opposition to the lawsuit has begun to emerge in court filings. Ian R. Cohen, an M&A attorney at IRC Legal Advisors LLC who states that he holds Bitcoin in self-custody, filed a motion on May 29 seeking permission to appear as amicus curiae.
In his filing, Cohen said he does not represent any party in the case and has no financial interest in the outcome. He submitted a 26-page proposed brief challenging the plaintiffs’ interpretation of New York’s lost-property law and its application to self-custodied Bitcoin wallets.
The case is expected to test whether dormant blockchain addresses can be treated as abandoned property under existing state law, a question that has not yet been formally resolved by New York courts.
Timechain Index founder Sani has also pointed to a potential procedural issue, noting that legal notices were reportedly sent to Pay-to-Public-Key-Hash addresses, while some older Satoshi-era holdings remain stored in Pay-to-Public-Key scripts that may not have received notice.
