New York ‘Abandoned Bitcoin’ Suit Shrinks as On-Chain Moves Undercut Claim

A New York lawsuit that seeks legal title to more than 39,000 long-dormant Bitcoin wallets has been narrowed after several of the named addresses moved funds on-chain, undermining the plaintiffs’ central claim that the coins had been abandoned. Galaxy Research head Alex Thorn said 44 wallets were quietly dropped from the case, all of which had recorded on-chain activity since the suit was filed.

The case, brought under the pseudonym “Noah Doe” alongside two Wyoming-registered entities, asks the New York Supreme Court to treat roughly 3.7 million BTC held across 39,069 wallets as abandoned property under the state’s lost-and-found statute. The wallet list reportedly includes addresses linked to Bitcoin’s pseudonymous creator Satoshi Nakamoto and to the exchange hacker behind the Mt. Gox collapse.

Movement undercuts the dormancy theory

According to Thorn, the 44 removed wallets held 21,443 BTC when the lawsuit was first filed. Since then, those addresses have moved a combined 46,334 BTC on-chain and now hold approximately 3,097 BTC between them. Writing in a July 8 thread on X, Thorn said “every single one had moved coins onchain since the case was filed.”

The removals appear consistent with language in the original complaint, which reportedly stated that any wallet showing on-chain activity would be dropped from the case. Crypto.news had earlier reported that a 30 BTC wallet linked to the lawsuit moved after nearly 15 years of inactivity, one of several transfers from named addresses that have chipped away at the claim that prolonged dormancy is evidence of abandonment.

Legal and technical observers have noted that Bitcoin held in cold storage can remain untouched for years, or decades, without the owner losing control of the private keys. Under that reading, inactivity alone offers little proof that a wallet’s owner has relinquished their claim to the funds.

Opposition builds ahead of July hearing

The suit has already attracted formal legal pushback. Attorney Ian R. Cohen has filed a challenge arguing that dormant, self-custodied Bitcoin does not meet the legal threshold for abandoned property under New York law. His filing arrived ahead of a July 14 hearing addressing procedural issues in the case, during which the court has stayed further action and limited the plaintiffs’ ability to pursue a default judgment.

The Digital Chamber, an industry advocacy group, has also submitted an amicus brief opposing the claim. The group warned that the plaintiffs’ interpretation of New York’s abandoned-property law could have consequences reaching well beyond the wallets specifically named in the suit, potentially exposing self-custodied digital assets more broadly to similar legal challenges.

Why the precedent matters

For European and UK observers, the case is being watched less for its odds of success and more for the precedent it could set on how courts treat dormant, self-custodied crypto assets. As institutional custody arrangements and MiCA-driven compliance frameworks expand across the EU, a US ruling that equates inactivity with abandonment could inform how regulators and courts elsewhere approach unclaimed or long-idle wallets held by funds, estates, or exchanges.

Galaxy’s earlier research also noted that even a favourable ruling for the plaintiffs would not automatically hand them control of the coins, given the practical barrier that Bitcoin held in self-custody requires the private key to move, regardless of what a court decides.

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