A nonprofit research group has stepped into what may be one of the strangest Bitcoin ownership disputes in legal history — a dormant Bitcoin lawsuit that asks New York courts to hand over roughly 3.7 million BTC to people who openly admit they cannot access a single coin.
Summary
Key takeaways
- The Bitcoin Policy Institute intervened as a defendant in a New York lawsuit seeking to claim approximately 3.7 million Bitcoin as abandoned property under state law.
- Plaintiffs led by Noah Doe used Article 7-B of the Personal Property Law, targeting roughly 39,000 wallets including Satoshi-era addresses and Mt. Gox hack coins.
- Galaxy Research valued the targeted coins at nearly $274 billion but called the claim unenforceable because plaintiffs hold no private keys.
- Judge Kathy J. King paused the case with a hearing set for July 14.
- At least 31 of the listed addresses have already moved coins since the suit was filed, directly undermining the plaintiffs’ abandonment theory.
Lawsuit Claims Ownership of 3.7 Million Dormant Bitcoin
The case, filed in New York County Supreme Court, rests on a genuinely novel legal theory: that Bitcoin wallets left untouched for years should be treated the same way New York treats a lost watch or unclaimed cash. The plaintiffs, operating under the pseudonym Noah Doe alongside two Wyoming-based companies, are invoking Article 7-B of the Personal Property Law — the state’s traditional lost-and-found statute — to seek a court declaration of ownership over roughly 39,000 dormant addresses.
What Bitcoin Is Actually Targeted
The scope of the claim is staggering. The targeted wallets hold approximately 3.7 million BTC, which Galaxy Research valued at nearly $274 billion in late May. Inside that pool sits roughly 1.10 million BTC from Satoshi-era addresses — coins that have never moved since Bitcoin’s earliest days — and nearly 80,000 BTC tied to the 2011 Mt. Gox hack. The Counterparty burn address, whose coins are by design permanently unspendable, is also listed.
The sheer scale makes this case impossible to ignore. If the theory succeeded, it could redefine what dormancy means for self-custodied digital assets across every state that has a lost-property statute.
How Plaintiffs Say They “Found” the Coins
The plaintiffs claim they identified dormant wallet addresses, reported them to the NYPD, then sent on-chain messages to wallet holders using Bitcoin’s OP_RETURN field. After waiting 90 days with no response, they asked the court to declare the wallets abandoned. It is an approach that maps a procedure designed for physical objects — a piece of jewelry, a bag of cash — onto cryptographic addresses that exist only as entries on a public ledger.
Bitcoin Policy Institute’s Legal Intervention and Defense
The Bitcoin Policy Institute, a nonprofit research organization, filed to intervene as a defendant, bringing the law firm White & Case with it. The institute submitted a proposed answer, 15 affirmative defenses, and signaled plans to file a motion to dismiss. Its core warning is pointed: the plaintiffs’ theory would allow anyone to claim self-custodied Bitcoin held for more than five years simply by downloading a public wallet address.
Case Paused Pending Hearing
Judge Kathy J. King paused the proceedings, with a hearing now scheduled for July 14. That pause comes as the courtroom grows crowded with opposition. Two amicus briefs had already landed before the institute’s intervention — one filed on May 29 by attorney Ian Cohen, who argues that New York’s lost-property law applies only to tangible physical objects like jewelry or cash and cannot be stretched to cover cryptographic addresses, and a second filed on July 7 by the Digital Chamber, the blockchain trade group, with help from consulting firm CahillNXT and Brown Rudnick attorney Stephen Palley.
The Digital Chamber’s brief goes further than procedural objections. It warns that a ruling in the plaintiffs’ favor would create a “pervasive cloud on title across self-custody wallets” and undermine the foundational principles of digital property ownership, with consequences that would ripple into traditional finance.
Challenges and Opposition to Plaintiffs’ Claims
The plaintiffs face a problem that no court declaration can solve: they admitted they do not hold the private keys to any of the wallets they are suing over. Without a private key, no party — not a winner in court, not a judge, not a regulator — can move a single satoshi. Galaxy Research director Alex Thorn made the point plainly: even a complete legal victory would produce only a declaratory judgment, not access to the coins. That judgment could, however, act as a “cloud on title” if those coins ever reached a regulated exchange, creating practical headaches for legitimate holders even without changing custody.
Wallets Are Already Moving
Perhaps the most damaging evidence against the abandonment theory is what has happened since the suit was filed. Thorn noted that the plaintiffs dropped 44 addresses after those wallets moved coins following the filing. More broadly, at least 31 of the listed addresses moved 17,527 Bitcoin in June, up from five addresses that transferred 4,834 BTC in February. One address, identified as “1KV47,” transferred 30 BTC — worth roughly $1.88 million — marking its first movement in nearly 15 years, since August 2011. Wallets that move are, by definition, not abandoned.
Amicus Briefs Contest the Suit’s Legal Basis
Cohen’s brief zeroes in on the mismatch between the statute and the asset class. New York’s lost-and-found law was written for a world of physical objects. Bitcoin addresses are not physical objects; they are mathematical constructs. Applying Article 7-B to them requires a legal leap the statute was never designed to support.
A Pseudonymous Defendant Challenges the Core Logic
A defendant identified only as John Doe 33 filed a verified answer and affirmative defenses on July 8, appearing without an attorney and claiming his portfolio exceeded $80 billion at the time of filing. His arguments are technically precise. He contends that public Bitcoin addresses are not legal persons and cannot be sued. He points out that the plaintiffs simply copied public address data onto a USB drive — an act that no more constitutes “finding” property than writing down a stranger’s bank account number. He also flags a critical practical flaw: OP_RETURN messages are often invisible to cold-storage users who have no reason to monitor the blockchain for notices. And he notes that at least one identified wallet owner had already contacted plaintiffs’ counsel by phone, directly disproving the claim that owners were unreachable.
Why This Case Matters Beyond the Courtroom
The legal theory at stake here is not merely academic. If a court were to accept that dormant Bitcoin wallets can be treated as abandoned property under a 19th-century style lost-property framework, the implications would extend far beyond these 39,000 addresses. Every long-term holder who keeps coins in cold storage and simply does not transact for years could, in theory, find their property subject to a similar claim in a jurisdiction with comparable statutes. The case also raises a harder question about how legacy legal infrastructure adapts to assets that are borderless, permissionless, and technically impossible to transfer without cryptographic authorization.
The July 14 hearing will determine whether the case continues or gets dismissed before it can set any precedent at all. But the fact that a $274 billion claim built on a legal theory that concedes no access to the underlying assets has advanced this far in a state court is itself a signal that the boundaries of Bitcoin ownership law are not yet settled.
FAQ
What is the Bitcoin Policy Institute’s role in the dormant Bitcoin lawsuit?
The Bitcoin Policy Institute intervened as a defendant to challenge the lawsuit that claims ownership of 3.7 million dormant Bitcoin wallets as abandoned property, submitting 15 affirmative defenses and planning a motion to dismiss through its legal team at White & Case.
What legal basis do the plaintiffs use to claim dormant Bitcoin wallets?
They rely on New York’s lost-and-found law, Article 7-B of the Personal Property Law, seeking a court declaration that unused Bitcoin wallets are abandoned property after attempting to notify owners via OP_RETURN on-chain messages and waiting 90 days.
Can the plaintiffs access the Bitcoins if they win the lawsuit?
No. The plaintiffs have admitted they do not hold the private keys required to move the coins. Even a complete court victory would produce only a declaratory judgment; without private keys, no coins can actually be transferred, though such a judgment could create a cloud on title if the coins ever reached a regulated exchange.
Why has the case been paused until July 14?
Judge Kathy J. King paused the proceedings to allow time to consider the motions, affirmative defenses, and amicus briefs that have been filed opposing the plaintiffs’ claims, with a formal hearing scheduled for July 14.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
