A controversial lawsuit seeking ownership of billions of dollars worth of dormant Bitcoin wallets has sparked criticism from Ripple CTO Emeritus David Schwartz, who described the legal arguments behind the case as deeply flawed.
The lawsuit was filed in New York by Noah Doe alongside Wyoming-based firms ABC Company and XYZ Company. The plaintiffs are asking the court to grant them control over 39,069 inactive Bitcoin wallets reportedly containing around 3.7 million BTC, currently valued at approximately $286 billion.
According to the filing, the wallets should be classified as abandoned property under New York law. The plaintiffs claim they discovered a flaw that allegedly makes the Bitcoin inaccessible to the original owners. They argue that because the wallets have remained inactive for years, the assets should be treated similarly to unclaimed bank accounts or lost property.
The massive 901-page filing reportedly includes addresses linked to Bitcoin creator Satoshi Nakamoto as well as the infamous “1Feex” wallet associated with the Mt. Gox hack.
Ripple’s David Schwartz quickly challenged the legal foundation of the case. Responding on X, he argued that the lawsuit lacks proper jurisdiction and questioned the plaintiffs’ reasoning for filing the case in New York.
Schwartz specifically criticized the argument that the Bitcoin wallets could be considered property “found” within New York state. According to him, the logic behind the jurisdiction claim is extremely weak and unlikely to stand up under legal scrutiny.
“There are many significant legal problems with the suit,” Schwartz explained. He emphasized that there appears to be no valid basis for the court to claim authority over the wallets simply because the plaintiffs reported them in New York.
Despite dismissing the case’s legal merits, Schwartz warned that the lawsuit could still create real-world complications for Bitcoin holders if the plaintiffs somehow secured a favorable ruling.
He noted that if funds from any of the targeted wallets were moved to a U.S.-based crypto exchange, the plaintiffs could attempt to convince the exchange to freeze the assets while claiming ownership rights over them.
According to Schwartz, even a legally flawed court ruling could become problematic if it is not challenged properly within the legal system. Over time, procedural complications could potentially make it harder to reverse decisions, even if the original ruling lacked proper jurisdiction.
The Ripple CTO Emeritus cautioned that in an extreme scenario, the plaintiffs could theoretically use such a ruling to interfere with legitimate Bitcoin owners and potentially seize crypto assets.
Schwartz concluded by saying he hopes the case is being taken seriously by legal experts due to the broader implications it could have for cryptocurrency ownership rights and dormant wallets.
The lawsuit arrives amid broader debates within the crypto community surrounding dormant Bitcoin holdings linked to Satoshi Nakamoto and lost wallets. Earlier this year, LayerTwo Labs CEO Paul Sztorc proposed a controversial Bitcoin hard fork idea involving Satoshi’s coins before later backing away from the concept.
