NY court pauses bid for title to $239B in Bitcoin wallets

A New York County Supreme Court judge on June 5 stayed a lawsuit that seeks legal title to 39,069 Bitcoin addresses. The order pauses the plaintiffs’ declaratory-judgment claim, including any request for an inquest or default judgment, until a July 14 hearing on a proposed amicus brief from attorney Ian R. Cohen.

The case was filed by plaintiffs using the names Noah Doe, ABC Company and XYZ Company against John Does 1–39,069. The amended complaint asks the court to declare the listed addresses abandoned under New York Personal Property Law Article 7-B and to award title. The plaintiffs allege the addresses are lost or abandoned, say each wallet falls under a statutory low-value threshold for the lost-and-found process, and state they attempted to notify pseudonymous address holders through on-chain messages. The complaint seeks legal title to the addresses, not the private keys needed to spend any coins.

Blockchain records show an address connected to the dispute, beginning 1LwWtS, sent about 35.546714 BTC on June 2 after years of apparent inactivity. The identity of the person or entity that signed that transaction is not established in court filings. Bitcoin transactions require control of a private key to produce the cryptographic signature that moves coins; a court judgment does not create that signature.

The June 5 stay interrupts a procedural path that could have relied on default relief because the defendants are listed by pseudonymous addresses and are unlikely to appear in court in the ordinary way. The stay remains until the July 14 hearing on Cohen’s proposed brief.

Cohen’s filing argues that Article 7-B was drafted for tangible found property that a finder can physically take into custody and surrender to authorities. The brief contends that scanning a public blockchain and identifying addresses does not equal possession of the coins or their private keys, and that a period of quiet on a public address is not by itself proof of abandonment. New York also has an abandoned-property statute specific to virtual currency, Abandoned Property Law Section 1319, which governs virtual currency held or owed by covered entities and requires reporting and delivery to the state comptroller after five years of dormancy; that statute addresses custodial obligations and does not directly resolve claims over self-custodied addresses.

The plaintiffs’ filings and outside estimates place the addresses at roughly 3.8 million BTC, a balance valued at about $239.6 billion using current price levels. Legal commentary in the record distinguishes between paper title and the cryptographic control needed to move coins: a court can declare legal ownership, but it cannot generate a private key or sign transactions on the Bitcoin network. If coins from any disputed address later move to an exchange or custodian that responds to court orders, a party holding a New York judgment could seek relief through traditional legal channels.

The June 2 transaction is part of the factual record the court must weigh when deciding whether periods of inactivity support a finding of abandonment under the law. The next scheduled proceeding is the July 14 hearing, where the court will consider whether the matter proceeds toward default relief or receives a fuller adversarial review of its legal and factual premises.