Ian Cohen battles $238B Bitcoin grab targeting Satoshi wallets

Attorney Ian R. Cohen has filed a new court rebuttal opposing efforts to revive a lawsuit that seeks control of roughly 3.8 million Bitcoin worth an estimated $238 billion, including wallets linked to Bitcoin creator Satoshi Nakamoto.

According to a June 20 X thread posted by Galaxy Digital research head Alex Thorn, Cohen’s June 19 filing pushes back against attempts by plaintiffs’ attorney David Lin to overturn a court-ordered stay in a New York case involving 39,069 Bitcoin wallet addresses.

The lawsuit was brought by anonymous plaintiffs identified as ABC Company, XYZ Company, and Noah Doe, who argue the wallets should be treated as abandoned property under New York law.

Earlier this month, New York Justice Kathy King granted a stay after Cohen sought permission to participate in the case as amicus counsel. A hearing related to the amicus application has been scheduled for July 14.

Cohen argued in his latest filing that the stay was issued by the court itself after reviewing the matter and was not simply granted at his request. According to the filing, the court exercised its authority under New York procedural law when it paused the proceedings.

Cohen says dormant wallets do not qualify as abandoned property

At the center of the dispute is the plaintiffs’ claim that long-inactive Bitcoin wallets can be classified as abandoned assets and transferred through a court order. Court documents cited by crypto.news previously showed that the plaintiffs contend the original owners can no longer access the funds because of an alleged technical flaw.

Among the addresses listed in the lawsuit are wallets associated with Satoshi Nakamoto and the “1Feex” address, which blockchain researchers and crypto investigators have linked to Bitcoin stolen during the Mt. Gox breach.

Cohen has repeatedly challenged the legal basis of the case. In earlier statements, he argued that New York’s lost-property laws do not apply to self-custodied Bitcoin, that inactivity alone does not establish abandonment, and that private keys fall outside the jurisdiction of New York courts.

His latest filing also disputes the practicality of the lawsuit. According to Cohen, the defendants are not identifiable individuals but 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 plaintiffs to secure a default judgment against the wallet addresses without meaningful opposition, potentially affecting property rights tied to billions of dollars worth of Bitcoin.

Recent blockchain activity challenges abandonment claims

Elsewhere in the filing, Cohen challenged the factual foundation of the abandonment argument by pointing to evidence that some of the targeted wallets have recently been active on-chain.

According to the filing, the complaint itself identified addresses that recorded outbound transactions, indicating that someone with access to the associated private keys had moved funds. Cohen cited those transactions as evidence that at least some wallet owners remain capable of controlling their Bitcoin.

Galaxy researchers reached a similar conclusion. Thorn said Galaxy identified 52 named addresses that collectively moved 34,335 BTC, while 29 of those addresses transferred 12,302 BTC after receiving notice of the lawsuit.

Criticism of the case has also emerged elsewhere in the crypto industry. Last month, Ripple CTO Emeritus David Schwartz questioned how a New York court could assert authority over Bitcoin wallets whose owners are unknown and scattered across a decentralized network. 

According to Schwartz, the lawsuit’s jurisdictional argument was one of its most serious weaknesses, and he warned that the legal theory could ultimately result in people losing control of their crypto assets.

The debate has even drawn comparisons to future discussions about dormant Bitcoin holdings. Recently, Binance founder Changpeng Zhao suggested that wallets linked to inactive owners, including those believed to belong to Satoshi, could one day be frozen after a transition to quantum-resistant cryptography if their holders fail to move funds within a designated migration period. 

Zhao said any such change would require community consensus and would not be decided by a single individual.