A New York court has temporarily halted a lawsuit seeking ownership of 39,069 dormant Bitcoin wallets holding an estimated 3.8 million BTC worth about $235 billion, setting up a closely watched legal battle over whether inactive cryptocurrency can be treated as abandoned property.
Key Takeaways
- A New York judge paused a lawsuit seeking ownership of 39,069 dormant Bitcoin wallets.
- The wallets reportedly contain around 3.8 million BTC, valued at roughly $235 billion.
- Plaintiffs argue the wallets qualify as abandoned property under New York law.
- Opponents say Bitcoin cannot be considered lost property and warn the case could reshape digital asset ownership rights.
What Happened?
Justice Kathy J. King issued an order on June 4 temporarily freezing a lawsuit filed by an anonymous plaintiff known as Noah Doe and two Wyoming based companies. The plaintiffs are attempting to gain legal ownership of thousands of dormant Bitcoin wallets by relying on New York’s lost property laws.
The court’s order prevents the plaintiffs from obtaining a default judgement before a scheduled hearing on July 14, giving the court time to consider legal objections challenging the foundation of the case.
🇺🇸 LATEST: A New York Supreme Court judge has stayed a lawsuit seeking ownership of nearly 40,000 dormant Bitcoin wallets, with a hearing set for July 14. pic.twitter.com/VEBx5m8c9U
— Cointelegraph (@Cointelegraph) June 8, 2026
Plaintiffs Seek Ownership of Dormant Bitcoin Wallets
The lawsuit was originally filed in March and later expanded to include 39,069 Bitcoin wallet addresses. The plaintiffs claim that the wallets have been abandoned because their owners failed to respond to notices and other attempts at contact.
According to court filings, Noah Doe used a proprietary algorithm to identify dormant wallets that could potentially qualify as abandoned property. The effort included notifying authorities and sending OP_RETURN messages on the Bitcoin blockchain in an attempt to reach wallet owners.
The campaign attracted significant attention within the crypto industry and was previously dubbed the “Great Bitcoin Dusting” by Galaxy Research.
The wallets targeted in the lawsuit collectively hold approximately 3.8 million BTC, making it one of the largest ownership disputes ever involving cryptocurrency.
Legal Challenge Questions Lost Property Theory
The case faced a major setback after New York attorney and Bitcoin holder Ian R. Cohen filed a motion seeking permission to submit a friend of the court brief opposing the lawsuit.
Cohen argues that New York’s lost and found laws were designed for physical property and cannot be applied to digital assets stored on a public blockchain.
He wrote:
According to Cohen, losing access to a wallet does not automatically mean an owner has voluntarily surrendered ownership rights. He also pointed to a 2022 law that directs certain unclaimed cryptocurrency assets to the state rather than private individuals.
The court accepted the objection for review and paused the proceedings pending further consideration.
Mt. Gox and Satoshi Linked Wallets Add Complexity
The dispute has become even more complicated due to the identities of some wallets listed in the lawsuit.
Court filings and industry analysis suggest certain addresses may be connected to funds stolen during the Mt. Gox exchange collapse. The first wallet named in the lawsuit reportedly contains nearly 79,957 BTC associated with the 2011 Mt. Gox hack, while the repayment process for affected creditors continues in Japan.
Galaxy Research also reported that roughly 21,900 addresses holding around 1.1 million BTC may be linked to wallet activity associated with Satoshi Nakamoto, Bitcoin’s pseudonymous creator.
These potential ownership claims could create jurisdictional and legal conflicts that extend beyond New York courts.
Recent Wallet Activity Weakens Abandonment Claims
Another challenge for the plaintiffs is that several supposedly dormant wallets have recently become active.
Blockchain data shows that multiple addresses included in the lawsuit moved funds after years of inactivity. One wallet transferred 47.26 BTC after nearly 14 years without activity, while another moved 35.55 BTC after remaining inactive since 2011.
Reports also indicate that 339 listed wallets moved coins after blockchain notices were distributed in 2025.
The activity suggests that at least some owners still maintain control over their assets, potentially weakening arguments that the wallets have been abandoned.
Why the Case Matters for Crypto?
The lawsuit highlights the growing tension between traditional property laws and modern digital assets.
Courts have long established rules for lost and abandoned physical property, but cryptocurrency presents unique challenges because assets remain visible on public blockchains even when they are inactive for years.
A ruling in favor of the plaintiffs could encourage similar claims involving dormant cryptocurrency wallets across the industry. On the other hand, a decision rejecting the lawsuit could reinforce ownership protections for long inactive wallets and provide greater legal certainty for Bitcoin holders.
The plaintiffs have until July 7 to respond to Cohen’s motion, with the next major hearing scheduled for July 14.
CoinLaw’s Takeaway
In my experience, this case is less about abandoned Bitcoin and more about defining digital ownership rights in the blockchain era. I found the court’s decision to pause the lawsuit significant because the legal theory behind the claim could have far reaching consequences for every cryptocurrency holder.
If courts begin treating dormant wallets as abandoned property, it could open an entirely new area of legal disputes. The July hearing may become one of the most important tests yet of how traditional property laws apply to decentralized digital assets.
