A high-stakes legal fight is heating up over what could be one of the largest claims on Bitcoin in history: roughly 3.8 million BTC — an estimated $238 billion — including addresses long tied to Bitcoin’s pseudonymous creator, Satoshi Nakamoto.
What happened
- Attorney Ian R. Cohen filed a June 19 court rebuttal pushing back on plaintiffs’ efforts to revive a New York lawsuit that targets 39,069 Bitcoin addresses. The filing was highlighted in a June 20 X thread by Galaxy Digital research head Alex Thorn.
- The suit, brought by anonymous plaintiffs using the names ABC Company, XYZ Company and Noah Doe, asks a New York court to declare dozens of long-dormant wallets “abandoned” under state law and transfer title by court order. The complaint includes some addresses historically linked to Satoshi and the “1Feex” address associated with Bitcoin stolen in the Mt. Gox breach.
- New York Justice Kathy King earlier granted a stay of the case after Cohen sought to participate as amicus counsel; a hearing on that amicus application is set for July 14. Plaintiffs’ attorney David Lin has pushed to lift the stay.
Cohen’s arguments
Cohen argues the stay wasn’t merely procedural courtesy but an exercise of the court’s authority under New York law. More substantively, he challenges the entire legal theory behind the suit:
- New York’s lost-and-abandoned property laws, Cohen says, do not apply to self-custodied Bitcoin.
- Mere inactivity on-chain does not equate to abandonment — private keys, not on-chain inactivity, determine control.
- Bitcoin addresses are pseudonymous, and the suit names addresses rather than identifiable people, making meaningful adversarial defense unlikely. Lifting the stay, Cohen warns, could let plaintiffs obtain default judgments against addresses without real opposition, risking control over billions in crypto.
On-chain facts that complicate the plaintiffs’ case
Cohen’s filing also points to concrete blockchain activity undermining the abandonment claim: the complaint itself identified addresses that later showed outbound transactions, indicating someone had access to the private keys. Galaxy’s research concurs — Thorn says his team found 52 named addresses that moved a total of 34,335 BTC, and 29 of those moved 12,302 BTC after receiving notice of the lawsuit.
Industry reaction and wider implications
Critics across the crypto industry have seized on the case’s jurisdictional and legal weaknesses. Ripple CTO Emeritus David Schwartz questioned how a New York court could marshal authority over decentralized, pseudonymous wallet owners spread globally. The case has raised broader fears about precedent: if courts accept the abandonment theory, it could imperil property rights over long-dormant holdings.
Even discussions about future technical transitions have surfaced. Binance founder Changpeng Zhao has speculated that in a hypothetical migration to quantum-resistant systems, wallets that fail to migrate could be frozen — though he emphasized such a change would require community consensus, not unilateral action.
What’s next
The July 14 hearing on Cohen’s amicus application will be watched closely. At stake is more than a single lawsuit: the decision could shape how courts treat self-custodied crypto, the reach of state lost-property law over digital assets, and whether courts can effectively adjudicate claims against thousands of pseudonymous addresses.
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