A quiet legal maneuver to seize title to more than $200 billion in dormant Bitcoin, including Satoshi Nakamoto's, has encountered a fundamental flaw.
A lost Bitcoin wallet lawsuit in New York now faces direct on-chain evidence that supposedly abandoned addresses are actively transferring billions of dollars in BTC, fracturing the plaintiffs’ core legal premise.
The dispute turns on whether dormant Bitcoin addresses can be treated as abandoned property when the coins remain under private-key control.
Since a pair of anonymous Wyoming limited liability companies filed a lawsuit seeking to claim 39,069 inactive Bitcoin addresses as lost property, 52 of those specific addresses have transferred roughly 34,335 Bitcoin. At current market valuations, the assets that moved are worth approximately $2.48 billion.
Operating under the pseudonym “Noah Doe,” the Wyoming entities framed the case as a lost-property lawsuit over Bitcoin under New York state law. The apparent strategy is to secure a default judgment granting them legal title to 3.799 million Bitcoin.
To fit the stringent jurisdictional and statutory requirements of the property law, the plaintiffs reportedly valued the claim at an astonishingly low $10.
In reality, the targeted addresses hold hundreds of billions of dollars, including coins mined during the network’s earliest days, widely attributed to the pseudonymous creator Satoshi Nakamoto.
Judge freezes path to an unopposed judgment
The legal strategy faced a severe roadblock in late May when pro-Bitcoin attorney Ian Cohen filed an amicus brief contesting the lawsuit's viability.
Cohen argued that New York’s lost-property laws do not apply to self-custodied Bitcoin or other digital assets, and that the state lacks jurisdiction over cryptographic keys.
In the realm of blockchain infrastructure, possession of a private key inherently constitutes legal ownership. A dormant address, the brief argued, is not abandoned property but rather a digital savings vehicle that simply has not been moved.
The intervention yielded immediate results. On June 4, New York Supreme Court Justice Kathy King granted Cohen a hearing and issued a stay on the proceedings, freezing any inquests or potential default judgments.
The stay prevents the plaintiffs from quietly securing a default victory, which was a highly probable outcome given that the 39,069 anonymous, pseudonymous defendants were unlikely to ever appear in a traditional courtroom to defend their assets.
On June 18, David Lin, the attorney representing the Noah Doe plaintiffs, filed a motion to vacate or narrow the stay. Lin argued that a non-party amicus should not have the authority to halt a case and that the statutory timeline for the defendants to answer should be permitted to expire.
Cohen issued a sharp rebuttal the following day, noting that the stay was a judicial directive initiated by the court itself.
The rebuttal highlighted a paradox in the plaintiffs' argument: Lin cited the lack of appearing defendants as a primary reason to lift the stay, despite the stay being implemented precisely to address that vacuum of opposition.
If no defendants answer, Cohen's brief remains the sole adversarial check before the court considers the largest attempted property seizure in US history.
$2.48 billion wallet transfers challenge the abandonment claim
The most critical evidence against the lawsuit stems from the public ledger itself. Cohen emphasized that the plaintiffs owe a duty of candor to the court, arguing that if any “abandoned” address moves coins, the entire legal premise is falsified.
Galaxy Digital's review of blockchain activity shows that 29 of the targeted addresses moved 12,302 Bitcoin just since they were officially “served” in the lawsuit.
Bitcoin On-chain Movement Since Case Filing (Source: Galaxy Digital)
The real-time spending of these assets proves the plaintiffs' targeting algorithm failed to differentiate between abandoned wallets and long-term cold storage.
Market analysts and researchers are beginning to recognize the gravity of the case. Alex Thorn, Galaxy Digital‘s head of research, emphasized the need for major industry stakeholders to intervene in the proceedings before a precedent is set.
He noted:
“A default judgment against ‘defendants' could grant legal title to 3.799 million BTC, including coins suspected of belonging to Satoshi.”
According to him, securing title to these assets would likely provide the foundation for years of aggressive litigation and ownership disputes.
He added that such an outcome threatens to drain millions in legal fees from the industry and introduce severe overhang risks into the broader cryptocurrency market, mirroring previous protracted legal battles over early Bitcoin holdings.
