- NY judge stayed a lawsuit claiming ownership of 39,069 dormant Bitcoin wallets.
- The wallets hold about 3.8 million BTC, valued at nearly $235 billion.
- A July 14 hearing will consider an amicus brief arguing wallets are abandoned.
A judge in New York has temporarily halted a massive lawsuit against 39,069 inactive Bitcoin wallets.
This landmark litigation may permanently alter the rules of ownership of inactive digital assets.
Thus, the entire cryptocurrency neighborhood is keeping a close watch on the advancement.
The Massive Scale of the Targeted Bitcoin Wallets
Justice Kathy J. King signed the order to show cause on June 4 and filed it publicly on June 5, according to the docket.
The oral argument is planned for 10:30 a.m. on July 14 in Part 6 of the New York County Courthouse, 60 Centre Street.
The targeted Bitcoin wallets hold roughly 3.8 million BTC in total.
At the current market rates, this wild haul is worth almost $235 billion.
Moreover, the large asset base encompasses iconic properties from the early times of blockchain use.
For instance, the list contains funds linked directly to the creator Satoshi Nakamoto. It also contains some of the infamous 2011 Mt. Gox exchange hacked coins.
These ties make it wary of market analysts about sudden liquidity shocks if the money flow at all.
In New York, the plaintiff’s name was redacted as “Noah Doe” in the bold lawsuit.
He claims ownership of these Bitcoin wallets under local lost-property laws.
In particular, Doe claims that the assets have been abandoned for the past 10 years.
Legal Arguments Over Lost Crypto Assets
However, a new legal intervention has disrupted the plaintiff’s ambitious strategy.
Attorney Ian R. Cohen moved to prevent the “aggressive declaration of private ownership.
He submitted an amicus brief arguing that these special Bitcoin wallets are not abandoned.
Rather, Cohen claims the private keys are in the secure custody of the original owners.
He says the public addresses are always visible to the entire world on the blockchain.
So, digital data mining is not the same as a real-world lost-and-found property.
In addition, the short identifies enormous risks to the local New York court system.
Certain of the listed items have already been listed in Japan’s current criminal rehabilitation proceedings.
Therefore, the imposition of a local rule can cause significant disputes with international law and the principles of federal preemption.
Next Steps for These Dormant Bitcoin Wallets
Justice Kathy J. King officially signed the strategic order to stay all further proceedings.
This important decision halts any immediate applications for a default judgment by the plaintiff.
Meanwhile, the legal team for the defense prepares for the upcoming court date.
The court has set July 14 as the date for a key hearing in the case.
During this session, the judge will formally consider the merits of the proposed amicus brief.
It’s the first real meeting of opposition for the litigator’s side.
Interestingly, the lawsuit has already caused unusual on-chain activity around the network.
Several named Bitcoin wallets have suddenly moved millions of dollars after years of complete silence.
Overall, the upcoming July ruling would have a lasting impact on the legal landscape of crypto custody for dormant accounts forever.
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