A lawsuit seeking legal ownership of long-dormant Bitcoin addresses, including wallets linked by researchers from the early days of Bitcoin mining, has been scaled back after the plaintiffs withdrew their names from 44 defendants who moved funds after filing the suit.
The July 7 voluntary suspension will only remove a fraction of the 39,069 wallets targeted in this incident. However, the filing brings increased scrutiny to the plaintiffs’ central argument that inactivity on the blockchain could support a court’s declaration that the assets are abandoned.
The lawsuit, filed in New York County Supreme Court by ABC Company, XYZ Company, and a pseudonymous plaintiff known as Noah Do, asks the court to recognize the plaintiffs as the owners of a wallet they say was found, reported to police, and left unclaimed after a notification campaign.
The incident attracted attention because the addresses collectively hold millions of Bitcoins, including early coins in the network and coins associated with Bitcoin’s pseudonymous creator Satoshi Nakamoto.
The latest filing does not explain why the 44 respondents were removed, but blockchain researchers tracking the case say all of these addresses moved coins after the lawsuit began.
Alex Thorne, head of research at Galaxy Digital, said in a post on July 8 that 21,443 BTC was stored at these addresses at the time the lawsuit was filed. He said he has since moved 46,334 BTC on-chain and currently holds about 3,097 BTC. At recent Bitcoin prices, the post-filing movement is worth about $2.9 billion.
According to Thorne, the largest address that was removed (listed as John Doe 106) held approximately 2,100 BTC at the start of the case, and while he moved more than 20,000 BTC through it in multiple transactions between March and July, it still held nearly 2,000 BTC.
Its on-chain activities feed directly into the plaintiff’s own framework. The plaintiffs said in their amended complaint that hundreds of addresses have already been removed from the broader pool because they took “on-chain” steps to show Noah Do that the wallets were not abandoned.
The remaining 39,069 wallets were abandoned because no such action was taken, according to the complaint.
The July 7 filing leaves 39,025 wallets in the lawsuit. But it also raises narrower and more pressing questions for courts. The question is whether the wallet can be treated as surrendered until the moment the transaction is signed, or whether silence alone can carry the legal weight imposed by the plaintiff.
John Doe 33 raises the stakes
Apart from BTC’s move, the lawsuit also faces direct challenges from people claiming ownership of the assets involved in the lawsuit.
Pseudonymous defendant John Doe, 33, who claims to be appearing as a natural person, filed a verified answer and affirmative defense on July 8. His filing states that he has not yielded jurisdiction and does not appear in the plaintiff’s exhibits as wallets, addresses, ledger coordinates or numbered entries.
John Doe, 33, said his portfolio exceeded $80 billion at the time the plaintiffs filed their lawsuit, according to the filing.
John Doe 33’s filing attacks this case on several fronts. He argues that because Bitcoin’s public address is not a legal entity, he cannot sue as a defendant.
He said that while the plaintiffs entrusted the NYPD with a USB drive containing public blockchain data, copying the public address data to the device does not mean the plaintiffs found the wallet or obtained the bitcoins associated with the wallet.
He also takes issue with the notification process. Plaintiffs relied in part on the OP_RETURN message, a feature of Bitcoin that allows data to be embedded in transactions.
However, John Doe 33 claims that this was not communicated to the wallet owner because the address is a public identifier, whereas the wallet and private key are private.
According to him, many wallet interfaces do not display the OP_RETURN payload, and there may be no reason for cold storage users to monitor for such messages.
His filing further alleges that the plaintiff’s attorney represented that reasonable efforts were made to locate the owner, even though the identified owner had contacted the attorney’s office by telephone.
If true, this allegation could increase scrutiny of the plaintiffs’ claims that the owners are unknown, unreachable, and silent.
Amicus filing expands the fight beyond Satoshi’s coins
Wallet’s move and the appearance of John Doe33 give new strength to an argument already being raised by outside parties.
Attorney Ian R. Cohen filed his first draft amicus brief in late May, asking the court to consider whether New York City’s lost property framework applies to public blockchain addresses and whether inactivity can substitute for evidence that the owner intends to abandon the property.
The Digital Chamber of Commerce, a blockchain industry group, filed its second draft court brief on July 6th. The group warned that accepting the plaintiffs’ theory would cast a cloud over self-custodial digital assets, putting pressure on owners to conduct transactions just to prove continued ownership.
The group also argued that the plaintiffs never owned the wallets and could not access their bitcoins without their private keys. The amended complaint itself acknowledges that a private key is required to withdraw cryptocurrency.
This leaves courts with a practical question that goes beyond title: whether a declaration of ownership has an operational effect on coins that can only be moved by existing keychains.
The Digital Chamber also raised concerns beyond the crypto market. If courts treat long periods of inactivity as abandonment, owners of other tokenized assets or blockchain-based records may face uncertainty as to whether their quiet ownership rights will continue to be protected when no public activity is taking place.
The discussion goes beyond Satoshi-era coins. The question is how courts understand digital property where control is evidenced through cryptographic signatures rather than through ownership of a physical object or a designated intermediary account.
(Tag translation) Bitcoin
