A New York lawsuit seeking legal ownership of long-dormant Bitcoin addresses has narrowed significantly after plaintiffs dropped 44 defendants whose wallets moved coins following the case filing, undermining the plaintiffs’ theory that inactivity signals abandonment.
On July 7, 2026, ABC Company, XYZ Company, and Noah Doe filed a voluntary discontinuance removing the 44 defendants from the case, which originally targeted 39,069 wallets. The case now covers 39,025 remaining wallets. Blockchain researchers tracking the litigation determined that all 44 removed addresses had moved Bitcoin on-chain after the lawsuit began.
The removed addresses held 21,443 BTC when the case was filed and moved coins through multiple transactions afterward, leaving 3,097 BTC in those addresses.
The most active removed address, John Doe 106, held 2,100 BTC at case start and moved coins across multiple transactions before retaining 2,000 BTC. The plaintiffs’ amended complaint had stated that hundreds of addresses had already been removed because they took on-chain action showing the wallets had not been abandoned.
Defendants Challenge Abandonment Theory
John Doe 33, a remaining defendant, filed a verified answer and affirmative defenses on July 8, 2026. John Doe 33 argues that “public Bitcoin addresses are not legal persons and cannot be sued as defendants.”
John Doe 33 also challenges the plaintiffs’ notice process, contending that OP_RETURN messages do not notify wallet owners because addresses are public identifiers while wallets and private keys are private. The defendant alleges that plaintiffs’ counsel represented reasonable efforts to locate owners despite an identified owner having contacted counsel’s office by telephone.
The plaintiffs claim they found the wallets, reported them to police, and left them unclaimed after a notice campaign. The addresses include coins from Bitcoin’s earliest years and those associated with Satoshi Nakamoto. However, the amended complaint acknowledges that a private key is required to withdraw cryptocurrency.
Amicus Filers Warn of Asset Cloud
The Digital Chamber, a blockchain trade association, filed a proposed amicus brief on July 6, 2026, warning that accepting the plaintiffs’ abandonment theory would place a cloud over self-custodied digital assets and pressure holders to transact merely to prove continued ownership. The Digital Chamber argued that the plaintiffs never possessed the wallets and cannot access the Bitcoin without private keys.
Ian R. Cohen, an attorney, filed a first proposed amicus brief in late May. Alex Thorn, head of research at Galaxy Digital, posted analysis of the case on July 8, 2026.
John Doe 33 challenges the plaintiffs’ factual claims, arguing that copying public address data onto a USB drive does not constitute finding or possessing wallets. The defendant’s position directly contradicts the plaintiffs’ claim that wallet owners were unknown and unreachable.
