New York Court Halts Bitcoin Wallet Lawsuit, Schedules July 14 Hearing on Amicus Brief

TLDR:

• A NY judge stayed the Noah Doe lawsuit on June 5, halting any default judgment on 39,069 dormant wallets. 
• An amicus brief argues NY’s lost-and-found statute cannot legally apply to dormant bitcoin wallet addresses.
• The targeted wallets hold an estimated 3.8 million BTC worth around $234 billion, per Galaxy Research analysts.
• Several dormant defendant wallets moved BTC after the lawsuit was filed, including a $3M transfer flagged in June. 

A New York Supreme Court judge has stayed a lawsuit targeting nearly 40,000 dormant bitcoin wallets, blocking any default judgment.

Justice Kathy J. King signed the order on June 4, filed publicly on June 5. The case involves plaintiffs seeking ownership of 39,069 wallets under New York’s lost-and-found statute.

A July 14 oral argument will determine whether a critical amicus brief is admitted. The brief argues the statute was never designed to apply to blockchain assets.

The Lawsuit and Its Legal Theory

The case, captioned ABC Company, XYZ Company, and Noah Doe v. John Does 1–39,069, draws on New York Personal Property Law Article 7-B.

The anonymous plaintiffs argue that dormant wallets qualify as “lost” property under state law. Under this theory, ownership can transfer to a finder if the original owner fails to claim assets within a statutory period.

Galaxy Research estimated the 39,069 addresses hold roughly 3.8 million BTC. At current prices, that figure is worth approximately $234 billion.

However, the complaint itself values each wallet at under $10, citing the difficulty of recovering assets without private keys.

The listed addresses include the “1Feex” wallet, long tied to the 2011 Mt. Gox hack. Several addresses also match what Galaxy Research describes as Satoshi-era “Patoshi” patterns, connecting them to Bitcoin’s creator. No defendant wallets have appeared in court, which had been clearing a path to default judgment.

The Amicus Brief Challenging Ownership Claims

M&A attorney Ian R. Cohen filed a May 29 motion to appear as amicus curiae. His 26-page brief argues the lost-and-found statute requires physical custody of a tangible object.

A blockchain address cannot be placed in an evidence locker, so the statute does not apply. Cohen holds no financial interest in the outcome and represents no named party.

Cohen’s brief also turns the complaint’s own language against the plaintiffs. Paragraph 27 of the amended complaint states that wallet owners lost access to funds due to a security issue.

Cohen argues this makes the dormancy involuntary, not abandonment. His brief puts it plainly: “A wallet that has been dormant for ten years, whose private key is stored on a steel plate in a bank vault, is not abandoned property. It is securely held property.”

Cohen also argues Noah Doe’s method does not constitute finding under the law. His brief states that Doe’s algorithm amounts to “data mining,” not discovery, and that claiming 39,069 wallets in a single sweep is “industrial-scale asset identification” that no provision of the statute contemplates.

He further warns that any ownership declaration would be functionally useless, writing that “the decentralized architecture of the Bitcoin network renders it structurally indifferent to judicial decrees.”

Cohen also noted that the Legislature amended New York’s Abandoned Property Law in 2022 to specifically address virtual currency, routing dormant crypto assets to the State Comptroller — not to private claimants.

Wallet Movements and the ‘Great Bitcoin Dusting’

Noah Doe used a proprietary algorithm to flag the wallets, then delivered USB drives to the NYPD’s 17th Precinct between December 2024 and April 2025.

A blockchain expert then sent OP_RETURN messages to each address, pointing to an abandonment notice page. Wallets that did not respond within 90 days were treated as abandoned.

Galaxy Research documented this campaign in October as the “Great Bitcoin Dusting.” It involved roughly 41,000 OP_RETURN messages sent to wallets collectively holding about 2.3 million BTC.

Analysts Zack Pokorny and Will Owens wrote that “whoever carried out the operation clearly understands the Bitcoin network on [a] deep technical level and took elegant measures to cover his tracks.”

Since the lawsuit was filed, several named wallets have moved funds. Galaxy Research head Alex Thorn flagged a June 6 transfer of 47.26 BTC, worth nearly $3 million, from defendant wallet number 37923.

A separate wallet dormant since March 2011 moved 35.55 BTC worth approximately $2.2 million on June 2. Those movements have drawn attention across the Bitcoin community and suggest some wallet holders are aware of the proceedings.