A New York lawsuit aimed at claiming nearly 3.8 million BTC tied to dormant wallet addresses has changed course after old Bitcoin wallets started moving funds, an actual holder stepped forward, and the court kept the case on hold pending another hearing on Sept. 8.
The case was filed in March. A plaintiff using the name Noah Doe is trying to rely on New York lost-property law to establish ownership over about 3.799 million BTC linked to 39,069 dormant Bitcoin addresses, worth about $239.3 billion based on the figures cited in the report. That pool allegedly includes 21,744 addresses attributed to Satoshi Nakamoto, holding about 1.09 million BTC valued at roughly $68.6 billion.
The lawsuit drew wide attention not only because of its scale, but because it raises a broader legal question in the United States: how ownership of digital assets should be recognized and protected. Under the legal theory described in the report, if address owners do not appear after service is completed, the plaintiff could seek a default judgment covering the 39,069 dormant addresses.
Judge Kathy J. King signed a stay on June 4, halting further proceedings, and set oral argument for July 14 to examine whether lost-property law can apply to blockchain-based assets. The case remains paused.
Dormant wallets began moving Bitcoin after the case spread online
As discussion of the suit spread on social media, several long-inactive Bitcoin holders started transferring coins.
On June 2, the first defendant address moved BTC. That standalone address had been dormant since March 2011 and transferred 35.55 BTC that day, worth about $2.2 million. On June 6, defendant address No. 37923 moved out 47.26 BTC, valued at nearly $3 million. On June 19, defendant address No. 1504 transferred 199.216 BTC; that wallet had been inactive since 2012.
According to Galaxy Research, 52 defendant addresses have moved 34,335 BTC, or about $2.163 billion, since the lawsuit was filed. Of those, 29 addresses transferred 12,302 BTC after “receiving service,” the report said.
With more coins leaving the named addresses, plaintiff counsel David D. Lin asked the New York court on June 18 to lift the stay and push the case forward more quickly.
Defendant No. 33 challenged the structure of the suit
Before the court ruled on that request, a defendant came forward.
On June 30, the owner of defendant Bitcoin address No. 33 filed a notice of appearance and a motion to dismiss in the New York Supreme Court, becoming the first actual holder to oppose Noah Doe’s claims.
The filing attacked the case on two fronts. First, it argued that a Bitcoin address is neither a natural person nor a legal entity, so it cannot itself be named as a defendant subject to the court’s jurisdiction. The real holder, the filing said, is a natural person with constitutionally protected property rights.
Second, the filing argued that publicly visible on-chain addresses cannot be “found” under Section 7-B of the Personal Property Law. According to the report, that statute was written for tangible property with a physical location and police custody procedures, and Noah Doe’s interaction with the operating logic of Bitcoin’s public ledger does not amount to finding property.
Defendant No. 33 also argued that the case is structurally unfair to defendants because the plaintiff can remain anonymous while any holder who appears must disclose identity, potentially creating personal safety risks for someone publicly linked to large Bitcoin holdings.
Plaintiff withdrew claims against 44 active addresses
On July 7, Noah Doe voluntarily withdrew claims against 44 addresses that had become active. Those addresses held about 21,443 BTC when the case was filed and later transferred more than 46,000 BTC, with the moved amount valued at over $2.9 billion. That left 39,025 addresses still named in the suit.
Among the 44 addresses removed from the case, address No. 106 held the largest Bitcoin balance. It had about 2,100 BTC at the start of the case, but moved more than 20,000 BTC through multiple transactions between March and July.
After the July 14 hearing, the court issued multiple Orders to Show Cause on July 16, set the next hearing for Sept. 8, and again paused the case in full, barring the plaintiff from pursuing any default judgment applications in the meantime.
New CLARITY draft could undercut the lawsuit’s legal theory
The dispute now reaches beyond whether Satoshi-linked Bitcoin can be claimed through a lost-property framework. It also goes to a larger question: in U.S. law, is ownership of digital property proven by exclusive control of private keys, or by possession through a physical object or an account with an intermediary?
The report said the Chamber of Digital Commerce has raised concern that, if long inactivity is treated as abandonment, the uncertainty could extend beyond crypto and affect tokenized assets or blockchain-based real-world assets. In that scenario, holders could face doubt over whether quiet ownership remains protected when no visible activity occurs.
The article frames Noah Doe’s suit as one that relies on a gap in existing law. On July 22, a new draft of the CLARITY bill addressed that issue directly.
Section 20216 of the latest draft defines a self-hosted digital asset as a digital asset for which the owner retains exclusive control of the private key needed to authorize transactions. It also says that a lawfully self-hosted digital asset may not be deemed abandoned or unclaimed solely because it is inactive, dormant, or because the owner has not expressed ongoing interest. The provision also bars forfeiture, reversion, adverse possession, finder’s-right claims, or similar property claims on that basis, and it would override state or local laws and regulations, according to the report.
If that language were enacted in the form described, the foundation of Noah Doe’s case would be directly weakened because the suit depends on equating dormancy with abandonment or unclaimed property.
At the same time, the draft distinguishes between two categories of digital assets: crypto assets directly controlled by individuals through private keys, and crypto assets held with exchanges or custodians. The new CLARITY language protects the first category, while state unclaimed-property rules would still apply to the second.
In practical terms, as the report puts it, digital assets deposited with an exchange or custodian may still face claims under lost-property or unclaimed-property rules if deposit addresses remain inactive for long periods or fall dormant after an institutional failure.
Outcome remains uncertain as the bill faces Senate hurdles
If the latest version of CLARITY passes, future cases of this kind would have clearer statutory guidance, and U.S. law would more explicitly protect ownership claims tied to dormant self-custodied addresses.
But the report also said the bill’s path through the Senate has not been smooth, with the two parties divided over ethics-related provisions. If CLARITY does not pass before Congress begins its summer recess, the final outcome of this lawsuit could remain highly uncertain.