US$234 Billion Bitcoin Case Stalled in Court, Thousands of Crypto Wallets Affected
New York Court Pauses Lawsuit Targeting Nearly 40,000 Dormant Bitcoin Wallets
The New York Supreme Court has temporarily halted legal proceedings in a lawsuit targeting nearly 40,000 dormant Bitcoin wallets. Judge Kathy J. King signed the stay order on June 4, and it was officially entered into the court record on June 5, preventing a default judgment against the wallets for the time being.
39,069 Wallets at the Center of the Case
The lawsuit, filed by ABC Company, XYZ Company, and Noah Doe, seeks ownership rights over 39,069 Bitcoin wallets under New York’s lost property laws.
The plaintiffs argue that these Bitcoin addresses have remained inactive for many years and may qualify as abandoned property under state law. If the original owners cannot be identified within a specified period, ownership could potentially be transferred to those who discovered the wallets.
According to Galaxy Research, the targeted wallets collectively hold approximately 3.8 million BTC. At current market prices, the holdings are estimated to be worth around $234 billion.
However, the lawsuit values each wallet at less than $10, citing the practical difficulty of accessing the funds without the corresponding private keys.
Several wallets included in the case have historical significance within the Bitcoin ecosystem. One of them is the 1Feex address, which has long been linked to the 2011 Mt. Gox hack. Other wallets reportedly display the “Patoshi” mining pattern, believed to originate from Bitcoin’s earliest days and potentially connected to Satoshi Nakamoto’s mining activity.
Amicus Brief May Influence the Outcome
On May 29, mergers and acquisitions attorney Ian R. Cohen filed a petition to submit an amicus curiae brief to the court.
In the 26-page filing, Cohen argued that New York’s lost property laws apply only to tangible physical property over which possession can be established. He contends that blockchain addresses cannot be treated like physical assets and therefore should not fall under the same legal framework.
An amicus curiae is an individual or organization that is not directly involved in a lawsuit but provides legal analysis or expertise to assist the court in reaching a decision.
Cohen also pointed to statements in the plaintiffs’ amended complaint indicating that wallet owners may have lost access to their funds due to security concerns. According to Cohen, this suggests the assets were not abandoned but rather remain inaccessible because of security-related circumstances.
He further argued that a wallet inactive for years, while its private key is securely stored, should not be considered abandoned property.
Additionally, Cohen noted that New York updated its unclaimed property laws in 2022 to include virtual currencies. Under those rules, dormant crypto assets should be handled by the State Comptroller rather than transferred to private individuals.
The court is expected to decide whether to accept the amicus curiae brief during a hearing scheduled for July 14.
Unusual Wallet Activity Draws Attention
Court documents show that Noah Doe identified the wallets using a proprietary algorithm and submitted the wallet information to the New York Police Department between December 2024 and April 2025.
A blockchain expert later sent OP_RETURN messages to each targeted wallet address, directing recipients to a webpage declaring the wallets abandoned. Wallets that did not respond within 90 days were subsequently classified as abandoned.
Galaxy Research previously referred to the effort as the “Great Bitcoin Dusting” in an October report. The report found that approximately 41,000 OP_RETURN messages were sent to wallets holding a combined total of around 2.3 million BTC.
Researchers Zack Pokorny and Will Owens stated that the individual behind the operation appeared to possess extensive technical knowledge of the Bitcoin network and took deliberate measures to conceal their identity.
Some Dormant Wallets Have Started Moving Funds
Following the filing of the lawsuit, several wallets named in the case began showing signs of activity.
On June 6, Galaxy Research Head of Research Alex Thorn reported that 47.26 BTC, worth roughly $3 million, was moved from one of the defendant wallets.
Another wallet that had remained inactive since March 2011 transferred 35.55 BTC, valued at approximately $2.2 million, on June 2.
These transactions have fueled speculation that some wallet owners may have become aware of the lawsuit and are now taking action regarding their Bitcoin holdings.
