A New York lawsuit seeking title to 3.799 million Bitcoin held in dormant addresses faces a fundamental contradiction: 52 of the targeted wallets have transferred 34,335 BTC since the case began, directly contradicting the plaintiffs’ legal premise that these addresses are abandoned property.
Anonymous Wyoming LLCs filed the lost-property action claiming title to 39,069 inactive Bitcoin addresses under New York law. The strategy hinges on proving abandonment. Yet Galaxy Digital’s blockchain analysis shows real-time spending of targeted assets, revealing that the plaintiffs’ targeting algorithm failed to differentiate genuinely abandoned wallets from long-term cold storage held by active participants.
The lawsuit names no specific defendants and assigns a $10 valuation to the claim despite addresses holding approximately $200 billion in Bitcoin. This undervaluation reportedly serves a jurisdictional purpose within New York’s lost-property framework. If successful, a default judgment could grant legal title to 3.799 million BTC, including coins suspected of belonging to Satoshi Nakamoto, Bitcoin’s pseudonymous creator.
On June 4, New York Supreme Court Justice Kathy King granted a hearing to pro-Bitcoin attorney Ian Cohen and issued a stay on proceedings. Cohen filed an amicus brief in late May contesting the lawsuit’s viability, arguing that New York’s lost-property laws do not apply to self-custodied Bitcoin and that the state lacks jurisdiction over cryptographic keys.
The stay has become contested terrain. On June 18, David Lin, attorney representing the Noah Doe plaintiffs, filed a motion to vacate or narrow the stay. Lin argued that a non-party amicus should not halt proceedings and that the statutory timeline for defendants to answer should expire. Cohen issued a rebuttal on June 19, asserting that the stay was a judicial directive initiated by the court itself, not Cohen’s authority.
The core legal conflict centers on private-key control. Under blockchain law, possession of a private key constitutes legal ownership. The 52 addresses that moved Bitcoin demonstrate active key control, a fact that directly undermines the abandonment premise on which the entire lawsuit rests.
Alex Thorn, Galaxy Digital’s head of research, highlighted the stakes in a statement reviewed by this publication: “A default judgment against ‘defendants’ could grant legal title to 3.799 million BTC, including coins suspected of belonging to Satoshi.”
Galaxy Digital’s analysis identified 29 addresses that moved 12,302 Bitcoin since official service of the lawsuit. The total transfers from the 52 active addresses reached 34,335 BTC, valued at approximately $2.48 billion at current market rates. This on-chain evidence of spending and movement directly refutes the claim that these addresses are dormant or abandoned.
The stay prevents default judgment while defendants remain anonymous and unlikely to appear in court. The case now hinges on whether the court will allow the abandonment claim to proceed despite clear evidence that a significant portion of the targeted addresses are actively controlled and regularly used.
