Attorney Ian R. Cohen has filed a new court argument against efforts to revive a lawsuit seeking control of about 3.8 million bitcoins worth an estimated $238 billion, including wallets linked to Bitcoin founder Satoshi Nakamoto.
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Ian Cohen opposed efforts to revive a lawsuit targeting 39,069 Bitcoin wallets holding an estimated $238 billion. Cohen argues that dormant Bitcoins held in private custody are not abandoned property under New York state law. Galaxy researchers discovered recent activity in dozens of targeted wallets, disputing claims that the coins were abandoned.
According to a June 20 X-thread posted by Alex Thorne, head of research at Galaxy Digital, Cohen’s June 19 filing is a rebuttal to plaintiffs’ attorney David Lin’s attempt to overturn a court-ordered injunction in a New York case involving 39,069 Bitcoin wallet addresses.
The lawsuit, filed by ABC Company, XYZ Company, and an anonymous plaintiff named Noah Do, alleges that the wallet should be treated as abandoned property under New York state law.
Earlier this month, New York Judge Kathy King granted a stay after Cohen requested permission to join the case as an amicus curiae. A hearing on the court application is scheduled for July 14.
Mr. Cohen argued in his latest filing that the suspension was issued by the court itself after considering the matter and was not granted simply at Mr. Cohen’s request. According to the filing, the court exercised its authority under New York State Procedure Law when it suspended proceedings.
Cohen says dormant wallets are not abandoned property.
At the center of the dispute is the plaintiff’s claim that Bitcoin wallets that have been unused for a long period of time are classified as abandoned assets and can be transferred by court order. Court documents cited by crypto.news show the plaintiffs allege that the original owners can no longer access their funds due to an alleged technical glitch.
Among the addresses listed in the complaint are wallets associated with Satoshi Nakamoto and the 1Feex address, which blockchain researchers and crypto researchers say are linked to Bitcoin stolen in the Mt.Gox breach.
Mr. Cohen has repeatedly disputed the legal basis for the lawsuit. In a previous statement, he argued that New York’s lost property law does not apply to self-custodial Bitcoin, that inactivity alone does not constitute abandonment, and that private keys are outside the jurisdiction of New York courts.
His recent filings also challenge the practicality of the lawsuit. Cohen said the defendants were 39,069 pseudonymous Bitcoin addresses rather than identifiable individuals, and it was unlikely that any affected parties would go to court to protect their interests.
The filing argues that lifting the suspension would allow plaintiffs to obtain default judgments against wallet addresses without meaningful opposition, potentially impacting property rights tied to billions of dollars worth of Bitcoin.
Recent Blockchain Activity Disputes Abandonment Claim
Elsewhere in his filing, Cohen disputed the factual basis of the abandonment argument, citing evidence that some of the targeted wallets had recently been active on-chain.
The complaint itself identifies the addresses that recorded the outbound transactions, indicating that someone with access to the associated private keys moved the funds, according to the filing. Cohen cited these transactions as evidence that at least some wallet owners maintain the ability to control their bitcoins.
Galaxy researchers have come to similar conclusions. Thorne said Galaxy identified 52 designated addresses that transferred a total of 34,335 BTC, with 29 of those addresses transferring 12,302 BTC after receiving notice of the lawsuit.
Criticism of the incident has also arisen elsewhere in the crypto industry. Last month, Ripple Chief Technology Officer Emeritus David Schwartz questioned how a New York court could assert authority over Bitcoin wallets whose owners are unknown and distributed across a decentralized network.
Arguments over jurisdiction are one of the most serious weaknesses in the case, Schwartz said, warning that the legal theory could ultimately result in people losing control of their crypto assets.
This discussion has even been compared to future discussions regarding dormant Bitcoin holdings. Recently, Binance founder Changpeng Zhao suggested that wallets linked to inactive owners, including what appears to be Satoshi’s, could someday be frozen after the transition to quantum-resistant cryptography if the owners fail to move their funds within the specified transition period.
Mr. Zhao said such changes require community consensus and cannot be decided by one individual.
