A New York judge has put the brakes on a high-stakes lawsuit targeting nearly 39,069 dormant Bitcoin wallets. According to court documents made public on June 5, New York Supreme Court Justice Kathy J. King signed an order to show cause on June 4 that stays all further proceedings related to the plaintiffs' request for a declaratory judgment. The order specifically blocks any application for an inquest or default judgment until oral arguments are scheduled for July 14 at the New York County courthouse.
Court records show King removed the phrase "and determination" from the standard stay language, leaving the case paused only until the hearing rather than a final ruling. A separate order filed the same day found an earlier request for injunctive relief moot, citing the plaintiffs' First Amended Complaint filed on May 1.
39,069 Wallets and 3.8M BTC in Dispute
The lawsuit, filed under the caption ABC Company, XYZ Company, and Noah Doe v. John Does 1-39,069, seeks a court declaration that the plaintiffs legally own thousands of dormant Bitcoin addresses under New York's lost-and-found property statute. Filed on May 1 through Brooklyn law firm Lewis & Lin LLC, the complaint argues that plaintiff Noah Doe discovered a security vulnerability in October 2024 that allegedly left certain wallet owners permanently unable to access their Bitcoin. Doe claims to have developed a proprietary algorithm to identify wallets meeting the legal standard for abandonment, reported findings to the NYPD, and spent over a year attempting to locate owners.
The filing states that Doe assigned ownership rights in all but 18 wallets to ABC Company in December 2025, after which ABC Company transferred a 17.7% interest to XYZ Company. Public attention surged after Sani, founder of blockchain analytics platform Timechain Index, highlighted the case on X in May. Sani estimated the listed wallets held roughly 3.7 million BTC, worth about $285 billion at the time. Separately, Galaxy Research estimated that the 39,069 addresses contained approximately 3.8 million BTC, valued at roughly $293.5 billion.
Among the identified addresses are the "1Feex" wallet (linked to the 2011 Mt. Gox hack) and wallets displaying Satoshi-era "Patoshi" mining patterns. The complaint also references the "12c6D" address associated with Satoshi Nakamoto. Curiously, the plaintiffs' valuation expert appraised each wallet at under $10 due to the uncertainty of recovering value from the assets.
Amicus Brief Challenges Legal Foundation
Opposition has emerged in court filings. Ian R. Cohen, an M&A attorney at IRC Legal Advisors LLC who holds Bitcoin in self-custody, filed a motion on May 29 seeking amicus curiae status. Cohen submitted a 26-page proposed brief challenging the plaintiffs' interpretation of New York's lost-property law and its application to self-custodied wallets. The case is set to test whether dormant blockchain addresses can be treated as abandoned property under existing New York law, a question that has not been formally resolved by state courts. Timechain Index founder Sani flagged a potential procedural issue: legal notices were reportedly sent to Pay-to-Public-Key-Hash addresses, while some older Satoshi-era holdings may remain in Pay-to-Public-Key scripts that never received notice.