“Lost and Found” or “Legal Loophole”? New York Lawsuit Battles Over 39,000 Dormant Bitcoin Wallets

BlockBeats reported on May 25 that a lawsuit filed in New York on May 1 is seeking a court ruling to claim ownership of 39,069 long-dormant Bitcoin wallets, raising major legal questions regarding lost crypto assets and property law.

The plaintiff, Noah Doe, and two Wyoming limited liability companies (ABC Company and XYZ Company) claim that the Bitcoins associated with these addresses are “abandoned” property found in accordance with the law, and have reported them to the New York Police Department under New York's lost property law. The lawsuit includes wallets of early Bitcoin miners and even addresses of Bitcoin creator Satoshi Nakamoto.

However, the legal basis of the lawsuit is questionable. Even if the court rules in favor of the plaintiffs, enforcement is technically impossible, because the Bitcoin network does not have a mechanism for “redistributing funds without a private key.” Analysts at research institution Castle Labs noted that the only exception would be if the coins were transferred to a regulated custodian or trading platform, in which case the court could force the intermediary to act.

The lawsuit lists a total of 39,069 Bitcoin addresses, but the founder of on-chain analytics platform Timechain Index estimates these addresses hold about 3.7 million Bitcoins (worth approximately $285 billion), far more than plaintiffs claim. Analysts also noted that the plaintiffs sent legal notices to address formats unrelated to the actual balances, a structurally flawed attempt. Data shows there are currently 3.5 million Bitcoins that have been dormant for 10 years and 6.6 million that have been dormant for more than 5 years.