A New York Supreme Court judge has halted proceedings in a lawsuit that sought to claim ownership of 39,069 dormant bitcoin wallets. The order, filed on June 5, effectively pauses any moves toward a default judgment and schedules a hearing for July 14 to consider a critical amicus brief.
Key Takeaways
- A New York Supreme Court order issued on June 5 has stayed all proceedings in a lawsuit aiming to claim ownership of 39,069 bitcoin wallets.
- The case is paused pending a July 14 hearing to determine whether an amicus brief will be admitted.
- The amicus brief argues that New York’s lost-and-found statute is inapplicable to digital assets controlled by private keys.
- The lawsuit, which has attracted significant attention within the Bitcoin community, could potentially lead to actions from the owners of some of the affected wallets.
Justice Kathy J. King issued the order to show cause on June 4, which was publicly filed on June 5. The order stays “all further proceedings in this action on Plaintiffs’ declaratory judgment claim, including any application for an inquest or a default judgment” until the scheduled hearing on July 14 at 10:30 a.m. in Part 6 of the New York County courthouse. The judge specifically amended the standard stay language to indicate the case is paused pending the hearing, rather than a subsequent determination.
In a separate ruling on the same day, Justice King determined that a prior motion for injunctive relief was moot, citing the plaintiffs’ First Amended Complaint filed on May 1 and another docket entry.
The ‘Noah Doe’ Case and Regulatory Implications
The legal action, titled ABC Company, XYZ Company, and Noah Doe v. John Does 1-39,069, gained public notice after its details were shared on X (formerly Twitter) on May 24. The anonymous plaintiffs, represented by Lewis & Lin LLC, are seeking a declaratory judgment to establish ownership over a substantial number of bitcoin wallets by invoking Article 7-B of New York Personal Property Law, commonly known as the state’s lost-and-found statute. This legal strategy posits that if an original owner fails to claim lost property within a specified period, ownership may transfer to the finder. However, this statute has not previously been applied to digital assets on a blockchain.
Estimates from Galaxy Research in May suggested that the 39,069 addresses held approximately 3.8 million BTC, valued at roughly $293.5 billion at the time of their report. Current market prices would place this value closer to $234 billion. The complaint itself notes that an unnamed expert valued each wallet at less than $10 due to the perceived difficulty and uncertainty of recovering the assets.
Among the wallets listed as defendants is the “1Feex” address, holding around 80,000 BTC, which has been publicly associated with the 2011 Mt. Gox hack. Other addresses identified in the lawsuit reportedly match “Patoshi” patterns from the Satoshi era, potentially linking them to Bitcoin’s founder.
The stay of proceedings followed a motion filed by Ian R. Cohen, an M&A attorney, seeking to participate as an amicus curiae. Cohen, who has been licensed in New York since 2010 and holds bitcoin in self-custody, submitted a proposed brief opposing the plaintiffs’ legal theory. He asserts he represents no party and has no financial stake in the case’s outcome.
Analysis of the Amicus Brief and Legal Stakes
Cohen’s proposed amicus brief outlines several arguments against the plaintiffs’ claim. A primary contention is that the lost-and-found statute presupposes physical possession of a tangible object, which is fundamentally incompatible with blockchain addresses. The brief argues that these wallets are not “lost” but “remained continuously visible to the entire world,” and the plaintiffs’ algorithmic identification constitutes “data mining” and “industrial-scale asset identification” rather than “finding” as contemplated by the statute.
A second key argument leverages the plaintiffs’ own complaint. It states that the targeted owners lost the ability to withdraw contents due to a “security issue,” which Cohen characterizes as “involuntary deprivation of access” rather than voluntary abandonment. He argues that a wallet with a securely stored private key, even if dormant for years, is “securely held property,” not abandoned.
Furthermore, Cohen highlights significant jurisdictional risks. The brief notes that the 1Feex address is subject to ongoing civil rehabilitation proceedings in Japan and potential U.S. Department of Justice forfeiture interests. A New York state court’s declaration of private ownership over these assets could conflict with these parallel proceedings and face challenges based on preemption and international comity.
The brief also questions the practical utility of a declaratory judgment without possession of the private keys. Cohen argues that the decentralized nature of Bitcoin makes it “structurally indifferent to judicial decrees,” echoing the maxim “not your keys, not your coins.” He warns that such a declaration could be misleading to exchanges and custodians regarding enforceable title.
Cohen also points to a 2022 amendment to New York’s Abandoned Property Law, which specifically addresses virtual currency and directs dormant financial assets to the State Comptroller, rather than private claimants. This legislative action, he argues, demonstrates a clear intent to regulate dormant cryptocurrency outside the framework of Article 7-B.
The ‘Great Bitcoin Dusting’ Campaign
According to the complaint, the plaintiff “Noah Doe” utilized a proprietary algorithm to identify these wallets. Between December 2024 and April 2025, USB drives containing the addresses were reportedly delivered to the NYPD’s 17th Precinct. Subsequently, a blockchain expert was directed to send OP_RETURN messages to each wallet address, linking to an abandonment notice page hosted by Salomon Brothers Strategic Advisors. This campaign was documented by Galaxy Research in October as the “Great Bitcoin Dusting,” involving approximately 41,000 OP_RETURN messages sent to wallets holding about 2.3 million BTC. Wallet owners who did not respond within 90 days were deemed by the plaintiffs to have abandoned their holdings.
Galaxy Research analysts noted the sophisticated technical understanding behind the operation, highlighting measures taken to obscure the originator’s tracks and effectively deliver messages to a large number of addresses.
Notably, several of the defendant wallets have transacted on-chain since the lawsuit was filed. On June 6, a transaction of 47.26 BTC, valued at nearly $3 million, was moved from defendant address number 37923. Another wallet, dormant since March 2011, moved 35.55 BTC, worth about $2.2 million, on June 2.
If admitted, Cohen’s amicus brief would represent the sole opposing viewpoint in the proceedings. The 39,069 defendant wallets were technically “served” through the OP_RETURN messages and a global press release, with the plaintiffs’ strategy relying on the absence of any direct court appearance to secure a default judgment. Plaintiffs have until July 7 to file opposition to Cohen’s motion.
Details can be found on the website : www.theblock.co