New York has seen new developments in a lawsuit involving about 3.8 million bitcoin. Counsel, Ian R. Cohen, has filed a counter-argument with the court against the resumption of the plaintiff ' s case. The focus of the dispute was on whether long-term unused bitcoin could be considered “abandoned property” under the laws of the State of New York and the transfer of control by court order.
The suit is targeting 39069 wallets.
The case concerned 39,069 bitcoin wallet addresses valued at approximately $238.0 billion. These included a wallet that was considered relevant to China, as well as a one-feex address that had been relevant to the investigation into the theft of bitcoin by Mt. Gox.
The plaintiff brought an action in an anonymous capacity, under the names ABC Company, XYZ Company and Noah Doe. It is argued that these long-silent wallets constitute abandoned assets and that the court should allow them to take over the relevant bitcoin.
Counsel opposed the stay.
In a submission dated 19 June, Cohen stated that the New York State law on lost property did not apply to the trusting of Bitcoin and could not directly prove that the assets had been abandoned simply because the address had not been transferred for a long time. He also maintains that the private key itself is outside the jurisdiction of the New York Court.
At the same time, he indicated that, if the court lifted the stay previously ordered, the plaintiff might, in the absence of a substantial confrontation, facilitate a default judgement against the wallet addresses. This would affect property rights equivalent to billions of United States dollars.
The chain transfer weakened the plaintiff's claim.
The most recent document also noted that some of the addresses listed in the indictment had been traded out, which meant that there were still people with the relevant private keys and able to move the funds. If the address could still initiate the transfer, the term “assets abandoned” would be difficult to establish.
Alex Thorn, Research Manager of Galaxy Digital, in an X post published on 20 June, stated that 52 named addresses identified by Galaxy had been transferred totalling 34,335 BTCs, of which 29 had been transferred after notification of the proceedings.
This case also raised questions of jurisdiction within the industry. The former CTO David Schwartz had previously stated that how the New York court claimed power over a group of owners who were unknown and distributed in a decentralised network was one of the weakest parts of the case.