A New York lawsuit has emerged seeking control of 39,069 dormant Bitcoin wallets containing approximately 3.7 million BTC, valued at about $286 billion at current prices. According to court filings, plaintiff Noah Doe and two Wyoming-based entities - ABC Company and XYZ Company - have asked a New York court to transfer control of these inactive Bitcoin wallets. The filing argues the wallets qualify as abandoned property under New York law because the original owners allegedly cannot access or use the funds due to a technical flaw. The case has drawn significant criticism from Ripple CTO Emeritus David Schwartz, who has challenged the lawsuit's legal foundation and warned of potential risks for Bitcoin users.
The lawsuit includes several high-profile Bitcoin addresses among the 39,069 wallets. As reported by court filings, the filing references addresses associated with Bitcoin creator Satoshi Nakamoto, along with the '1Feex' wallet that blockchain researchers and crypto investigators have previously tied to funds stolen during the Mt. Gox breach. The plaintiffs also claimed these addresses had been reported to the New York Police Department, comparing the dormant Bitcoin to unclaimed bank assets or lost property. According to the latest reports, these addresses are included in a 901-page declaration filed as part of the lawsuit.
Ripple CTO Emeritus David Schwartz has challenged the lawsuit's legal foundation, questioning how a New York court could claim authority over Bitcoin wallets with unknown owners spread across a decentralized network. In posts shared on X, Schwartz wrote that 'The most serious flaw in the suit is that jurisdiction is supposedly based on the fact that 'the found property that is the subject of this suit is situated here.' He dismissed the core legal argument, calling the claim that the property was 'found' in New York 'comically bad.' Schwartz has also responded to important inquiries on social media, stating 'There are many significant legal problems with the suit' and emphasizing 'For one thing, there's no basis for the court to have jurisdiction.'
Despite dismissing the legal arguments, Schwartz warned that the lawsuit could still create practical problems for Bitcoin holders if a court issued a favorable ruling before the case faced serious opposition. He explained that 'The problem is that bad things can still happen' and cautioned that exchanges and custodians could face pressure if funds from disputed wallets eventually moved through U.S.-based platforms. Schwartz noted that plaintiffs might attempt to freeze assets by arguing the Bitcoin legally belonged to them under the court order, even if another court later decided the ruling lacked jurisdiction. 'Suppose they get a ruling in their favor and someone moves funds from one of these wallets to a US exchange. These guys would likely ask the exchange to freeze the funds on the theory that the funds belong to them,' he warned.
Schwartz emphasized the importance of industry participants paying close attention to the case before any ruling advances further through the legal system. He warned that 'Even though the NY ruling should be considered void ab initio due to no jurisdiction, it's not entirely inconceivable that a US court may find that due to the passage of time, the claim that the ruling is void was procedurally defaulted.' Under such circumstances, he cautioned that 'plaintiffs could conceivably, wind up stealing people's crypto.' This represents the latest in a series of public discussions involving crypto regulation, taxation, and XRP Ledger governance that Schwartz has participated in recently. 'I really hope that somebody is taking this case seriously,' he concluded, urging proper legal scrutiny of the lawsuit's jurisdictional claims.
