New York Lawsuit Targets $285 Billion in Dormant Bitcoin — But Legal Experts Say It Can’t Work

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A 901-page legal filing claims ownership of nearly 40,000 inactive wallets, including those tied to Satoshi Nakamoto. The problem? Courts can’t move Bitcoin without private keys.

A lawsuit quietly filed in New York on May 1 is making waves in the crypto world — and for good reason. Three plaintiffs, identified as Noah Doe and two Wyoming-based LLCs operating as ABC Company and XYZ Company, are asking a court to recognize them as the rightful owners of 39,069 dormant Bitcoin wallet addresses.

The legal theory behind the claim is straightforward, if unconventional: the plaintiffs argue that long-inactive Bitcoin wallets constitute “abandoned property” under New York state law. They say they discovered these wallets, reported them to the New York Police Department, and are now entitled to ownership — the same way someone might claim an unclaimed bank account.

The catch? Bitcoin doesn’t work like a bank account.

What’s Actually Inside Those Wallets

The scope of the claim is staggering. The listed addresses collectively hold an estimated 3.7 million BTC — worth roughly $285 billion at current prices, according to Sani, founder of the onchain analytics platform Timechain Index.

Among the wallets named in the 901-page filing are address “12c6D,” widely associated with Bitcoin’s pseudonymous creator Satoshi Nakamoto, and “1Feex,” linked to the infamous Mt. Gox exchange hacker. The plaintiffs appear to have cast a wide net, pulling in some of the most storied — and most scrutinized — addresses in Bitcoin’s history.

For context, Bitbo data shows approximately 3.5 million Bitcoin have gone untouched for more than a decade, with another 6.6 million dormant for over five years. Much of this supply is considered permanently lost, whether through misplaced private keys, deceased holders, or early miners who simply walked away.

Why Experts Say the Lawsuit Goes Nowhere

Legal observers and blockchain analysts are skeptical — not just about the merits of the abandonment argument, but about whether a court ruling would even matter technically.

Noveleader, lead research analyst at Castle Labs, explained the core problem plainly: the Bitcoin network has no mechanism to reassign funds without the corresponding private key. A favorable court order would be, in effect, unenforceable. The only narrow scenario where legal intervention could have teeth, the analyst noted, is if any of the named coins were ever moved to a regulated exchange or custodian — at which point a court could compel that intermediary to act.

The lawsuit also carries a significant procedural problem. Most of the early Satoshi-era coins sit in Pay-to-Public-Key (P2PK) output formats, but the plaintiffs sent legal notices to Pay-to-Public-Key-Hash (P2PKH) addresses — essentially the wrong format, which often hold no funds at all. Castle Labs called this approach “structurally defective,” noting that even attempting to notify wallet holders via Bitcoin’s OP_RETURN function would fail, since that method only reaches active recipients monitoring their wallets.

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A Symbolic Filing — With Real Legal Implications

Beyond the technical dead ends, the lawsuit raises a deeper question that courts have never definitively answered: when does inactive cryptocurrency become legally abandoned property?

The plaintiffs’ argument treats dormant Bitcoin like uncashed checks or forgotten savings accounts — but the analogy breaks down quickly. Unlike traditional financial instruments, Bitcoin has no custodian to contact, no institution to compel, and no infrastructure for forced transfer. Many of the wallets in question may belong to deceased individuals or holders who simply prefer to hold long-term, neither of which meets the legal standard for abandonment.

For now, the suit reads more like a legal thought experiment than a viable claim. But it may push lawmakers and courts to finally grapple with how property law should treat a currency that no government controls and no institution can access without the owner’s key.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.