Court Halts Legal Bid to Seize $234 Billion in Inactive Bitcoin (BTC) Wallets

Key Points

A New York court has suspended legal proceedings targeting 39,069 inactive Bitcoin addresses containing approximately $234 billion in cryptocurrency
An individual using the pseudonym “Noah Doe” initiated the legal action invoking New York’s abandoned property regulations
Legal professional Ian R. Cohen submitted a friend-of-the-court document contending that cryptocurrency wallets cannot be deemed legally “abandoned” under current law
Multiple addresses named in the litigation have begun transferring assets following public disclosure of the case
The court has scheduled a hearing for July 14 to determine whether the friend-of-the-court submission will be accepted

A judicial officer in New York’s Supreme Court has temporarily halted legal proceedings that sought to establish ownership over approximately 40,000 inactive Bitcoin addresses. The litigation, initiated by someone identifying themselves only as “Noah Doe,” focuses on addresses containing roughly 3.8 million BTC, valued at approximately $234 billion based on current market rates.

Judge Kathy J. King executed the stay order on June 4, with the document entering the public record on June 5, freezing all proceedings including any progress toward a default ruling. The court has established July 14 as the date for the next hearing at the courthouse in New York County.

The litigation, formally designated as ABC Company, XYZ Company, and Noah Doe v. John Does 1-39,069, was originally filed on March 11, 2026, with modifications submitted on May 1. According to Noah Doe’s claims, he developed a computational algorithm capable of detecting dormant addresses with potential security weaknesses. He reportedly delivered USB storage devices listing these wallet addresses to the NYPD’s 17th Precinct during the period spanning December 2024 through April 2025.

Subsequently, he engaged a cybersecurity specialist to transmit OP_RETURN blockchain messages to each address, pointing holders toward a website where they had a 90-day window to demonstrate their wallets remained in active ownership. From an initial pool of 42,001 identified addresses, 424 owners came forward and were excluded from the case. The remaining 39,069 addresses formed the foundation for a declaratory judgment petition under New York’s lost property legislation.

The Legal Filing That Halted Proceedings

On May 29, New York legal practitioner Ian R. Cohen filed paperwork requesting permission to participate as amicus curiae, accompanied by a comprehensive 26-page legal document challenging the lawsuit. Cohen maintains no representation of any involved party and claims no personal financial stake in the case’s resolution.

His central contention asserts that New York’s lost property statute was designed specifically for physical, tangible items rather than blockchain-based digital assets. He maintains that deploying an algorithm to scan a publicly accessible distributed ledger does not qualify someone as a legal “finder” under statutory definitions.

Cohen additionally highlighted that New York’s Abandoned Property Law underwent revisions in 2022 to explicitly address unclaimed digital currency. Under that framework, dormant cryptocurrency assets must be transferred to the State Comptroller rather than private claimants.

He further contended that blockchain-based OP_RETURN notifications and a worldwide press announcement fail to satisfy constitutional requirements for proper legal notification, especially concerning deceased wallet holders or individuals who don’t speak English.

“A wallet that has remained inactive for a decade, with its private key preserved on a steel plate inside a bank vault, cannot be classified as abandoned property. It represents securely maintained assets,” Cohen stated in his filing.

Cryptocurrency Addresses Begin Showing Activity

Following widespread media coverage of the lawsuit, multiple addresses identified in the case have initiated transactions. On June 6, an address that had been dormant since June 2011 transferred 47.26 BTC, representing approximately $2.88 million in value. Two days earlier, on June 2, a separate address inactive since March 2011 moved 35.55 BTC.

Alex Thorn, research director at Galaxy, observed the activity on X, commenting that Bitcoin from 2011 referenced in the litigation is “awakening and moving onchain.”

The address inventory encompasses the “1Feex” address, which contains approximately 80,000 BTC and has been associated in media reports with the 2011 Mt. Gox hack. Cohen’s legal brief emphasized that a New York court’s ownership determination regarding those assets might create conflicts with the ongoing Japanese civil rehabilitation process and potential United States federal asset forfeiture interests.

The judicial stay means proceedings now advance toward the July 14 hearing with Cohen’s legal arguments officially under consideration. The plaintiffs must submit their response by July 7.