Digital Chamber files amicus brief in New York dormant Bitcoin ownership case

Blockchain trade group the Digital Chamber has filed an amicus brief opposing a New York lawsuit that seeks ownership of 39,069 dormant Bitcoin wallet addresses holding an estimated 3.7 million BTC.

In a court filing submitted on Monday, the Digital Chamber argued that allowing dormant self-custodied Bitcoin wallets to be treated as abandoned property would create a “pervasive cloud on title across self-custody wallets.” 

The trade association said the plaintiffs’ legal theory could weaken long-established principles of digital property ownership and produce consequences extending beyond the cryptocurrency sector into traditional finance.

The filing is the second amicus brief submitted in the case, which was originally brought in May by a plaintiff identified as Noah Doe and two Wyoming-based companies. The lawsuit asks the New York Supreme Court to declare that 39,069 inactive Bitcoin addresses qualify as abandoned property under Article 7-B of New York’s Personal Property Law and transfer ownership of those wallets to the plaintiffs.

According to Sani, founder of blockchain analytics platform Timechain Index, the disputed addresses collectively hold about 3.7 million BTC worth roughly $234 billion at current prices. The list also includes several addresses associated with Bitcoin creator Satoshi Nakamoto.

Digital asset ownership at the centre of dispute

Court filings show Noah Doe claims he discovered the wallets after identifying what he described as a security vulnerability that permanently prevented some owners from accessing their Bitcoin. The lawsuit says he spent more than a year attempting to identify the owners before filing the case and later assigned ownership interests in most of the claimed wallets to two Wyoming-based companies.

The Digital Chamber, which describes itself as the oldest and largest digital asset trade association representing more than 250 members, including exchanges, banks, and investment firms, argued that the plaintiffs’ interpretation of New York law would affect self-custodied digital assets far beyond the wallets named in the lawsuit.

Legal opposition to the case has continued to grow. Last week, a pseudonymous defendant identifying as “John Doe 33” filed a motion asking the court to dismiss the lawsuit, arguing that Bitcoin addresses are data strings rather than legal entities and therefore cannot be sued. 

M&A attorney Ian R. Cohen has also sought permission to participate as amicus curiae, challenging the plaintiffs’ interpretation of the state’s lost-property law.

Dormant wallets continue showing activity

While the legal dispute moves forward, several of the listed Bitcoin addresses have become active again.

Galaxy Digital head of research Alex Thorn has recently highlighted that at least 31 wallets named in the lawsuit transferred a combined 17,527 BTC during June, compared with five addresses that moved 4,834 BTC in February.

Separately, blockchain data shared by Galaxy Research showed Bitcoin address “1KV47” transferred 30 BTC, valued at about $1.88 million, on Saturday after remaining inactive since August 2011.

Court proceedings are currently paused after New York Supreme Court Justice Kathy J. King stayed the case until oral arguments scheduled for July 14, preventing the plaintiffs from seeking a default judgment before the hearing.

Even if the plaintiffs ultimately succeed in court, control of the Bitcoin itself remains uncertain. A holder would still need the private keys to access funds stored in the disputed wallets, and the lawsuit does not establish possession of those keys.