Justice Kathy J. King of the New York Supreme Court signed an order on June 4 staying all proceedings in a lawsuit seeking ownership of 39,069 dormant bitcoin wallets, with the order filed publicly on June 5. The stay blocks any move toward default judgment ahead of a July 14 hearing scheduled for 10:30 a.m. in Part 6 of the New York County courthouse at 60 Centre Street. The case, captioned ABC Company, XYZ Company, and Noah Doe v. John Does 1-39,069, attempts to leverage New York's lost-and-found statute to claim ownership over wallets estimated to hold approximately 3.8 million BTC, marking an unprecedented application of state property law to blockchain assets.
Court Order Stays Proceedings Pending July 14 Hearing
The order stays "all further proceedings in this action on Plaintiffs' declaratory judgment claim, including any application for an inquest or a default judgment" pending the hearing, per the docket. King struck the words "and determination" from the boilerplate stay language, so the order on its face stays the case pending the July 14 hearing rather than pending a later determination. In a separate ruling filed the same day, King found that an earlier motion seeking injunctive relief was moot, referencing the plaintiffs' First Amended Complaint filed May 1.
Lawsuit Targets 39,069 Bitcoin Wallets Under Lost-and-Found Statute
The case drew public attention after Sani, founder of bitcoin analytics platform Timechain Index, posted about it on X on May 24. The anonymous plaintiffs, represented by Brooklyn-based Lewis & Lin LLC, are seeking a declaratory judgment establishing ownership over tens of thousands of bitcoin wallets under New York Personal Property Law Article 7-B, the state's lost-and-found statute. Galaxy Research estimated in May that the 39,069 addresses held about 3.8 million BTC, worth roughly $293.5 billion at the bitcoin price it used at the time. At current prices, 3.8 million BTC would be worth about $234 billion. The complaint itself says an unnamed expert valued each wallet's value at less than $10 because of the challenge and uncertainty of recovering value from the assets.
Listed defendant addresses include the "1Feex" wallet, which holds approximately 80,000 BTC and has long been linked in public reporting to the 2011 Mt. Gox hack, as well as addresses that Galaxy says match Satoshi-era "Patoshi" patterns, linking them to Bitcoin's founder.
Ian Cohen Files Amicus Brief Opposing Ownership Claim
The stay followed a filing by Ian R. Cohen, an M&A attorney at IRC Legal Advisors LLC in Mineola who has been licensed in New York since 2010 and holds bitcoin in self-custody. Cohen filed a May 29 motion seeking permission to appear as an amicus curiae, submitting an affirmation and a 26-page proposed brief opposing the plaintiffs' theory. Cohen says in the motion he does not represent any named party and has no financial interest in the outcome.
Cohen's brief argues the lost-and-found statute presumes that the finder has physical custody of a tangible object that can be locked in an evidence locker, which is impossible for blockchain addresses. The wallets were never lost or hidden, the brief argues, but "remained continuously visible to the entire world." Noah Doe's algorithm "is not 'finding'" but "data mining," and his single algorithmic sweep claiming 39,069 wallets at once is "industrial-scale asset identification" that no provision of the statute contemplates, the filing argues.
Paragraph 27 of the amended complaint states that Doe identified a "security issue with digital wallets resulting in owners losing their ability to withdraw the contents." Cohen writes that if the targeted owners cannot withdraw because of a security flaw, "their inability to transact is not voluntary abandonment, it is involuntary deprivation of access." The brief frames the resulting picture: "A wallet that has been dormant for ten years, whose private key is stored on a steel plate in a bank vault, is not abandoned property. It is securely held property."
Cohen also flags that the 1Feex address "is the subject of ongoing civil rehabilitation proceedings administered by a court-appointed trustee in Japan, and remains a potential subject of United States Department of Justice criminal forfeiture interest." A New York state-court declaration of private ownership over those assets "would risk conflict with parallel proceedings and could be subject to challenge under principles of preemption and international comity," the brief notes.
The brief further argues the declaratory judgment Noah Doe seeks would be functionally useless without the private keys, which the plaintiffs do not have. "The decentralized architecture of the Bitcoin network renders it structurally indifferent to judicial decrees," Cohen writes. Cohen also pointed to New York's Abandoned Property Law, which the Legislature amended in 2022 to specifically address virtual currency. That framework routes dormant financial assets to the State Comptroller rather than to private claimants.
OP_RETURN Messages Served as Legal Notice to Wallet Holders
The complaint says Noah Doe used a proprietary algorithm to flag the wallets, then delivered USB drives containing the addresses to the NYPD's 17th Precinct in batches between December 2024 and April 2025. He then directed a blockchain expert to send OP_RETURN messages to each wallet address pointing to an abandonment notice page hosted by Salomon Brothers Strategic Advisors, a firm that shares a name with, but appears separate from, the historic Wall Street investment bank.
That campaign was documented in October by Galaxy Research as the "Great Bitcoin Dusting," involving roughly 41,000 OP_RETURN messages sent to wallets collectively holding about 2.3 million BTC. Wallet owners who failed to respond within 90 days were treated by the plaintiffs as having abandoned their wallets. Galaxy Research analysts Zack Pokorny and Will Owens wrote, "... whoever carried out the operation clearly understands the Bitcoin network on [a] deep technical level and took elegant measures to cover his tracks and deliver the messages to a large swath of addresses."
Defendant Wallets Move Millions in Bitcoin After Case Filing
Several of the listed defendant wallets have transacted onchain since the lawsuit was filed. Galaxy Research head Alex Thorn flagged a June 6 movement of 47.26 BTC worth nearly $3 million at current prices from defendant address number 37923, last active on June 17, 2011. A separate wallet named in the suit and dormant since March 2011 moved 35.55 BTC worth about $2.2 million on June 2.
If Cohen is admitted, he would apparently be the only adversarial voice in the proceeding. The 39,069 defendant wallets were "served" via the OP_RETURN messages and the global press release, and the plaintiffs' theory required that essentially none appear in court, clearing a path toward a default judgment declaring the plaintiffs the owners of the wallets and their contents. The plaintiffs have not yet filed an opposition to Cohen's motion, though they have until July 7 to file opposition papers under the briefing schedule set in the order.
FAQ
What did Justice Kathy J. King order on June 4 in the bitcoin wallet lawsuit?
Justice Kathy J. King signed an order on June 4 staying all proceedings in the lawsuit seeking ownership of 39,069 dormant bitcoin wallets, blocking any move toward default judgment ahead of a July 14 hearing scheduled for 10:30 a.m. at the New York County courthouse.
How did the plaintiffs attempt to serve legal notice to the bitcoin wallet holders?
The plaintiffs directed a blockchain expert to send OP_RETURN messages to each wallet address pointing to an abandonment notice page. This campaign, documented by Galaxy Research as the "Great Bitcoin Dusting," involved roughly 41,000 OP_RETURN messages sent to wallets collectively holding about 2.3 million BTC, with wallet owners who failed to respond within 90 days treated as having abandoned their wallets.
What arguments does Ian Cohen make in his proposed amicus brief?
Cohen argues the lost-and-found statute presumes physical custody of tangible objects, which is impossible for blockchain addresses. He contends the wallets "remained continuously visible to the entire world" and were never lost, that Noah Doe's algorithm constitutes "data mining" rather than "finding," and that a security flaw preventing withdrawals represents "involuntary deprivation of access" rather than voluntary abandonment.
