A New York Supreme Court justice has paused proceedings in a lawsuit seeking ownership of 39,069 dormant Bitcoin wallets, blocking any default judgment while the court reviews a contested amicus brief. The stay, issued by Justice Kathy J. King, puts one of the most unusual property-law fights in crypto on hold until a July 14, 2026 hearing at 10:30 a.m.
The case, filed as ABC Company XYZ Company and Noah Doe v. John Does 1–39,069, asks the court to declare that the plaintiff, described as a finder, may claim title to tens of thousands of apparently inactive Bitcoin wallets under New York Personal Property Law Article 7-B. The complaint alleges that the wallets have been dormant long enough to qualify as unclaimed property, with plaintiffs estimating 39,069 addresses and filings citing an aggregate market-value figure near $235 billion.
Dormant Wallets Test New York Property Law
The court entered the stay so it could fully consider a proposed amicus brief filed by attorney Ian R. Cohen. Plaintiffs must submit opposition papers by July 7, 2026, before the July 14 hearing addresses whether traditional lost-property rules can reach blockchain-recorded assets.
Cohen’s brief challenges the central legal theory behind the claim. It argues that Bitcoin “cannot be physically ‘lost’ or ‘abandoned’ in the same manner as tangible property,” and that on-chain dormancy does not necessarily equal abandonment of ownership.
The brief draws a sharp distinction between losing access to private keys and giving up an asset. In that framing, private-key loss may block control without proving abandonment, especially when inactivity can result from cold storage, unclaimed inheritance or deliberate long-term holding.
Cohen also points to New York law amended effective November 22, 2022, which already treats virtual currency as reportable unclaimed property subject to a five-year dormancy period and state escheat mechanisms. That statutory framework suggests unclaimed digital assets flow through state processes, not private finder claims.
Private Keys Become the Core Evidentiary Problem
The valuation question adds another layer of uncertainty. Court filings summarized in briefing indicate that the plaintiff’s own expert valued each wallet at less than $10 for certain opinions, a figure that contrasts sharply with headline market estimates and underscores the evidentiary gap between theoretical balances and recoverable value.
The July hearing will test how far longstanding property doctrines can stretch when applied to cryptographic custody and public-ledger balances. A ruling for the plaintiff could encourage more private claims against dormant addresses, while a ruling aligned with the amicus position could reinforce the legal difference between lost access and abandoned property.
The case could also influence how future litigation treats self-custody, dormant balances and evidentiary standards for proving control over private keys. For custodians, regulators and estate planners, the dispute raises a practical governance question around who can assert rights over inactive on-chain assets.
The docket has broader historical and cross-border implications as well. Filings note that some addresses have been linked in public reporting to the Mt. Gox repayment process, adding another layer of complexity to any attempt to map analog property law onto blockchain realities.
For now, the stay prevents the case from moving into default judgment territory before the amicus challenge is heard. The court’s next move will be closely watched for signals on whether dormancy alone can support legal claims to Bitcoin wallets.
