A high-profile lawsuit in New York targeting the ownership rights over Bitcoin wallets allegedly belonging to the pseudonymous creator Satoshi Nakamoto has been put on hold. Galaxy Research Head of Research, Alex Thorn, reported this latest development on social media, highlighting that the case continues to draw significant attention within the cryptocurrency industry.
Scope of the lawsuit and assets in question
The lawsuit, filed in March at the New York Supreme Court, centers around claims over approximately 3.799 million BTC. The plaintiffs are registered as “Noah Doe” and two anonymous Wyoming-based limited liability companies. The suit called for certain Bitcoin addresses, dormant for many years, and their assets to be recognized as the property of the plaintiffs under New York’s lost property regulations.
The primary focus of the case is a set of addresses believed to be associated with Satoshi Nakamoto. According to the court file, this segment covers 21,744 addresses holding around 1.09 million BTC. Should the claim be recognized, it could set a contentious precedent, not only for these specific assets but also for how inactivity on the blockchain relates to ownership rights more broadly.
The plaintiffs argued that Bitcoin allegedly linked to Satoshi Nakamoto and many other assets should be classified as lost property, thereby granting legal ownership to the “finder.”
Challenges and technical debate
Ian R. Cohen, an external party to the proceedings, submitted an opinion to the court on May 29 contending that the case is built on a weak legal foundation. Cohen asserted that New York’s lost property laws do not extend to Bitcoin funds secured through users’ private keys. He also emphasized that prolonged inactivity on a Bitcoin address does not necessarily mean its assets have been abandoned.
Cohen’s central objection is that in the world of Bitcoin, ownership hinges on control of the private key. Without the private key, a wallet cannot truly be considered “found.” A dormant address, he argued, reflects untransferred holdings—not lost property.
Mini glossary: A private key is a unique cryptographic element that allows users to conduct transactions with assets in a Bitcoin wallet. Control and authority over assets on the Bitcoin network depend on access to this key, making it central to debates about ownership.
Cohen informed the court that Bitcoin ownership is established through private keys; an inaccessible wallet cannot be considered found, and dormant addresses do not qualify as lost property.
Court’s latest decision
On June 4, Judge Kathy King granted Cohen the right to a hearing and temporarily halted the entire proceeding. As a result, any potential in absentia judgments in favor of the plaintiffs or further steps in the case have been suspended. The plaintiffs’ attorneys challenged this court order, but Cohen has since provided a detailed rebuttal to their objection.
Another notable aspect of the case concerns on-chain activity. Public records indicate that some of the allegedly “lost” assets have, in fact, been moved by their rightful owners. This finding suggests potential flaws in the plaintiffs’ method for identifying addresses and further weakens their claim that the assets should be legally considered “found property.”
