A New York County Supreme Court case is testing whether long-dormant bitcoin can be treated as abandoned property, with Galaxy Research valuing the disputed holdings at nearly $274 billion in late May. The lawsuit is led by a plaintiff using the pseudonym Noah Doe, who argues that bitcoin sitting untouched in nearly 39,000 wallets falls under Article 7-B of New York’s Personal Property Law.
The complaint says the plaintiffs tried to reach wallet owners by reporting the addresses to the New York City Police Department and by sending messages through Bitcoin’s OP_RETURN feature. After waiting 90 days without a response, they asked the court to declare the wallets abandoned. The wallets at issue reportedly include about 1.10 million BTC tied to Satoshi-era addresses and another 80,000 BTC believed to be linked to the 2011 Mt. Gox hack.
BPI enters case with 15 affirmative defenses
The Bitcoin Policy Institute, or BPI, said on X that it has joined the lawsuit as a defendant and is being represented by White & Case. The group has filed a proposed answer, set out 15 affirmative defenses, and said it plans to seek dismissal. Its argument is narrow and technical: under Bitcoin’s current protocol, ownership cannot be transferred if the private keys are unavailable.
The plaintiffs have acknowledged that they do not control the private keys for any of the wallets named in the case. That point sits at the center of the opposition. Critics of the lawsuit say Bitcoin offers no mechanism to reassign control of a wallet without the original key material.
Proceedings paused before July 14 hearing
Judge Kathy J. King has paused all proceedings until a hearing scheduled for July 14. During that pause, two amicus briefs opposing the plaintiffs’ theory have been filed with the court, one by attorney Ian Cohen and another by industry group Digital Chamber.
In a brief dated May 29, Cohen argued that New York abandonment law has traditionally applied to tangible assets such as jewelry or cash, not dormant bitcoin. Digital Chamber advanced a similar position in a separate filing on July 7, backed by consulting firm CahillNXT and attorney Stephen Palley of Brown Rudnick.
Wallet activity weakens abandonment claim
Alex Thorn, Galaxy’s director of research, said the plaintiffs removed 44 wallet addresses from the filing after those wallets showed activity once the case became public. That movement cuts against the idea that the assets had truly been abandoned.
Another anonymous defendant, John Doe 33, had already entered the case before BPI by filing a verified answer and affirmative defenses without legal counsel. He argues that public crypto addresses are not legal persons and cannot be sued, and that copying wallet data does not amount to possession or control of funds. John Doe 33 also said OP_RETURN messages are often ineffective because many wallets do not surface them, while cold-storage users may have no reason to check such messages at all. He further alleged that at least one wallet owner contacted the plaintiffs’ legal team, challenging the claim that the owners are unidentifiable or unreachable.