Digital Chamber Backs Dismissal of NY Lawsuit on 39,069 Dormant Bitcoin Wallets

Blockchain trade association the Digital Chamber filed an amicus brief in the New York lost property case seeking ownership of thousands of dormant Bitcoin addresses. 

The Monday filing is the second amicus brief in the case. It opposes the claims of ownership, arguing that treating dormant wallets as abandoned property would create a “pervasive cloud on title across self-custody wallets.”

Digital Chamber argues that a ruling based on the plaintiffs’ theory would undermine the “foundational principles of digital property ownership, with negative ripple effects reaching the traditional finance industry.”

The amicus brief was filed in a lawsuit brought by “Noah Doe” and two Wyoming-based companies in late May, seeking ownership of 39,069 dormant Bitcoin addresses, in what could become a test of how inactive crypto may be treated under the state’s lost-property law.

The listed addresses hold an estimated 3.7 million Bitcoin (BTC) worth about $234 billion and include some of the wallet addresses associated with Bitcoin creator Satoshi Nakamoto, according to Sani, founder of analytics platform Timechain Index. 

The Digital Chamber files an amicus brief to dismiss the case seeking ownership of 39,069 Bitcoin wallets. Source: iapps.court.state.ny.us 

The Digital Chamber describes itself as the oldest and largest digital asset trade association representing over 250 members, including crypto exchanges, banks, investment firms and other industry participants.

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Dormant Bitcoin wallets awaken after lawsuit

Some of the long-dormant Bitcoin wallets named in the lawsuit have been waking up.

At least 31 of the listed addresses moved 17,527 Bitcoin in June, up from five addresses that transferred 4,834 BTC in February, according to Galaxy Digital head of research Alex Thorn. 

Source: Alex Thorn

Bitcoin address “1KV47” transferred 30 BTC, worth about $1.88 million, on Saturday, marking the wallet’s first movement in almost 15 years, since August 2011.

Regardless of the lawsuit’s outcome, it is unclear how the plaintiffs could gain control of the assets without holding the private keys to the wallets.

On Thursday, a pseudonymous defendant filed a notice of appearance and motion to dismiss, claiming they control one of the dormant wallets named in the lawsuit.

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