Attorney Ian R. Cohen has filed a new court rebuttal opposing efforts to revive a lawsuit aimed at claiming control over approximately 3.8 million Bitcoin, valued at about $238 billion, including wallets connected to Bitcoin’s creator, Satoshi Nakamoto.
Summary
- Ian Cohen has fought back against attempts to reactivate a lawsuit targeting 39,069 Bitcoin wallets estimated to be worth $238 billion.
- Cohen argues that inactive self-custodied Bitcoin should not be considered abandoned property under New York law.
- Recent analyses by Galaxy researchers have revealed activity in many of the targeted wallets, disputing claims of abandonment.
In a June 20 post on X by Galaxy Digital’s research lead, Alex Thorn, it was highlighted that Cohen’s June 19 submission counters efforts by plaintiffs’ attorney David Lin to lift a court-ordered stay in a New York case involving 39,069 Bitcoin wallet addresses.
The lawsuit is brought by anonymous plaintiffs identified as ABC Company, XYZ Company, and Noah Doe, who argue that the wallets should be deemed abandoned properties under New York law.
Earlier this month, New York Justice Kathy King approved a stay after Cohen requested to join the case as amicus counsel. A hearing regarding the amicus application is scheduled for July 14.
Cohen stated in his recent filing that the stay was granted following the court’s review, and was not merely granted upon his request. The filing indicated that the court acted in accordance with New York procedural law when it paused the proceedings.
Cohen argues dormant wallets are not classified as abandoned property
The essence of the dispute revolves around the plaintiffs’ claim that Bitcoin wallets inactive for extended periods should be regarded as abandoned and transferrable via a court order. Previous documents referenced by crypto.news indicated that the plaintiffs contend the original owners can no longer access their funds due to a purported technical issue.
Included among the wallet addresses cited in the lawsuit are those connected to Satoshi Nakamoto and the “1Feex” address, which blockchain analysts and crypto investigators link to Bitcoin stolen during the Mt. Gox hack.
Cohen has consistently questioned the legal basis of the lawsuit. He has previously stated that New York’s lost-property laws do not apply to self-custodied Bitcoin, that mere inactivity does not equate to abandonment, and that private keys lie outside the jurisdiction of New York courts.
His latest filing further challenges the feasibility of the lawsuit, contending that the defendants are not identifiable individuals but rather 39,069 pseudonymous Bitcoin addresses, making it unlikely that the affected parties would appear in court to defend their interests.
The filing argues that lifting the stay could allow the plaintiffs to obtain a default judgment against the wallet addresses lacking due opposition, potentially jeopardizing property rights related to billions of dollars in Bitcoin.
Recent blockchain activity disputes abandonment claims
In another section of the filing, Cohen contested the factual grounds of the abandonment claim by citing evidence that some targeted wallets have exhibited recent on-chain activity.
According to the filing, the complaint itself acknowledged addresses that executed outbound transactions, suggesting that someone with access to the private keys moved the funds. Cohen cited these transactions as evidence that some wallet owners still maintain control over their Bitcoin.
Galaxy researchers have reached a similar conclusion. Thorn noted that Galaxy identified 52 named addresses that collectively transferred 34,335 BTC, with 29 of those addresses moving 12,302 BTC after being informed about the lawsuit.
Criticism of the case has emerged from various quarters of the crypto industry. Last month, Ripple CTO Emeritus David Schwartz questioned how a New York court could assert jurisdiction over Bitcoin wallets owned by individuals who remain unknown and distributed across a decentralized network.
Schwartz noted that the lawsuit’s jurisdictional claim represents a significant weakness, cautioning that the underlying legal theory could result in individuals losing control of their cryptocurrency assets.
This discussion has also led to comparisons with future debates surrounding dormant Bitcoin holdings. Recently, Binance founder Changpeng Zhao suggested that wallets belonging to inactive owners, including those believed to belong to Satoshi, could potentially be frozen following a shift to quantum-resistant cryptography if their holders fail to transfer funds within a specified migration period.
Zhao emphasized that any such transition would require community consensus and would not be dictated by a single individual.
