A New York state court judge has halted all proceedings in a lawsuit seeking legal ownership of nearly 40,000 dormant Bitcoin wallets holding an estimated 3.79 million BTC, worth roughly $285 to $293 billion at current prices, depending on the source consulted, with crypto.news citing $285 billion and Bitcoin Magazine reporting $293 billion.

Judge Kathy J. King issued the stay on June 5, 2026, freezing the case until a July hearing determines whether an independently filed legal brief challenging the lawsuit's core theory will be formally admitted into the record.

The case was filed in March 2026 in New York Supreme Court, New York County, by a pseudonymous plaintiff calling himself "Noah Doe" along with two Wyoming LLCs, ABC Company and XYZ Company, all represented by Lewis & Lin LLC of Brooklyn. A First Amended Complaint was filed on May 1, 2026, running to 901 pages, signaling the scope and ambition of the claim.

The suit invokes New York's Personal Property Law Article 7-B, a lost-and-found statute originally written for tangible physical objects, to claim that prolonged wallet inactivity legally constitutes abandonment. The 39,069 wallets named in the suit were identified using a proprietary algorithm Doe developed between October 2024 and April 2025 to scan public blockchain data for addresses dormant at least five years and unresponsive during multiple Bitcoin price rallies. Notably, 424 wallets were removed from the filing after showing subsequent on-chain movement, confirming those addresses had active owners and directly complicating the abandonment argument. The suit also names wallets attributed to Satoshi Nakamoto-era early miners, the 1Feex address associated with the 2011 Mt. Gox hack (holding approximately 80,000 BTC), and Casascius physical Bitcoin coin holdings.

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An Independent Voice Raises Foundational Objections

New York attorney Ian R. Cohen voluntarily filed an amicus brief on May 29, 2026, arguing the lawsuit rests on a fundamental misreading of the law.

"Abandonment requires intentional relinquishment of ownership and an external act manifesting that intent," Cohen wrote. "Mere inactivity, no matter how prolonged, is not abandonment."

Cohen further argued that New York already addressed dormant cryptocurrency assets through a 2022 amendment to its Abandoned Property Law, which routes such holdings to the State Comptroller through a formal escheat process, not to private claimants.

His brief also challenged the adequacy of Doe's notification efforts. Broadcasting OP_RETURN messages (short data strings attached to Bitcoin transactions) and issuing a press release, Cohen argued, do not meet the constitutional standard for due process notice, particularly for deceased holders, non-English speakers, or wallets using Pay-to-PubKey addresses from Bitcoin's earliest days. That older format predates modern Bitcoin conventions and may not receive OP_RETURN messages in the same way as later address types, making the notice argument both legally and technically significant.

The July hearing will decide whether Cohen's brief is formally admitted into the record.

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The Practical Problem No Court Can Fix

Even setting aside the legal arguments, the lawsuit faces an obstacle no judge can resolve. Bitcoin operates on a globally distributed network that does not recognize court orders. Ownership of a Bitcoin wallet is defined entirely by possession of its private cryptographic key, and only the key holder can authorize any transaction. The plaintiffs hold none of these keys.

According to reporting by Crypto Times, Ripple CTO David Schwartz raised jurisdiction concerns, noting that a New York ruling carries no weight on the Bitcoin network itself and suggesting that only Bitcoin SV might honor such rulings, given its more centralized governance model, a direct contrast to Bitcoin's decentralized structure.

Cardano founder Charles Hoskinson called the effort "court adventurism," while Blockstream CEO Adam Back described the viability of the claim as "remarkably stupid."

The on-chain data is also complicating the abandonment narrative in real time. On June 6, 2026, 47.26 BTC moved from defendant wallet No. 37923, dormant since June 17, 2011. Four days earlier, a wallet inactive since March 2011 transferred 35.55 BTC, one of the first named addresses to show any movement after being included in court filings.

Across all of 2026, more than 103,900 BTC aged between 5 and 15 years have moved on-chain, totaling roughly $7.6 billion in value, according to data from Checkonchain.

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Why This Case Has Implications Far Beyond New York

Many of the wallets named in the suit almost certainly belong to individuals outside the United States. Cohen's brief raises this directly, noting that Bitcoin has no legal situs in New York and that many holders are unlikely to be New York residents. The question of whether a state court's ownership declaration could bind wallet holders in Lagos, Karachi, Nairobi, or Dhaka has no clear answer, but the question itself is significant.

In Africa, where crypto adoption jumped 52 percent year-over-year between mid-2024 and mid-2025 and where Nigeria and Ethiopia both ranked in the global top 15 for adoption, many users hold Bitcoin in self-custody wallets precisely because traditional banking access is limited.

Wallet dormancy caused by regulatory uncertainty, such as Nigeria's 2021 to 2023 banking ban on crypto transactions, is not the same as intentional abandonment. Cohen's argument, while focused on New York law, maps onto that reality.

Kenya's Virtual Asset Service Providers Act, signed in November 2025, explicitly excludes personal self-custody from its licensing requirements, a deliberate protection that the Noah Doe legal theory would directly undercut.

South Africa presents a separate but related concern. Draft regulations from the National Treasury would require holders above a certain threshold to disclose private keys to enforcement officers on demand, with penalties reaching R1 million or five years in prison for non-compliance.

Taken together, the New York lawsuit and the South African proposals represent pressure on self-custody rights from two directions at once: one from a private party using civil law, the other from the state using regulatory power.

India adds another dimension to the global picture. Home to the world's largest population of crypto self-custody users by absolute numbers, India permits self-custody wallets and has no formal legal definition of "abandoned" digital assets as of 2026, meaning a New York precedent could embolden similar claims in Indian courts.

Pakistan brings the regional picture full circle. Its Virtual Assets Bill 2026, signed into law this year and establishing the Pakistan Virtual Assets Regulatory Authority, makes Pakistan the first South Asian country with a comprehensive crypto regulatory framework. Personal self-custody is not directly regulated under the legislation, but observers note the New York case could be referenced by Pakistani lawmakers and litigants as a test case for dormant self-custody assets.

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What Comes Next

The July hearing will not resolve the lawsuit. It will only determine whether Cohen's amicus brief enters the formal record, a step that may shape how Judge King evaluates the statute's applicability.

The case is the first attempt in history to litigate this question in a US state court. It arrives in the wake of a related but distinct proceeding: in January 2025, the UK High Court dismissed James Howells' bid to recover a hard drive containing 8,000 BTC from a Newport landfill, finding no realistic prospect of success. That case turned on physical media rather than algorithm-identified wallet addresses, but it stands as the only comparable judicial precedent.

If the Noah Doe lawsuit proceeds on the merits, it will be the first judicial test of whether inactivity alone can strip a Bitcoin holder of ownership, a question with consequences that extend well past the borders of New York.