Digital Chamber Files Amicus Brief to Kill NY Lawsuit Targeting 39,069 Dormant Bitcoin Wallets

The Digital Chamber has filed an amicus brief urging a New York court to throw out a lawsuit that would hand the state ownership of 39,069 dormant BBTC$63,178.00▲0.60% wallets — arguing the case threatens the foundational right to self-custody and could set a precedent that puts every self-custodial wallet user in the country in the crosshairs. The filing lands as a New York Supreme Court order dated June 5 has already stayed proceedings, freezing a default judgment after a separate attorney’s amicus arguments convinced a judge that the targeted wallets were not abandoned property. (CoinTelegraph)

The litigation — tagged in legal commentary as the “Lost Bitcoin” case — turns on a novel and uncomfortable question: whether dormant cryptocurrency wallets can be claimed as abandoned property under state law. A New York plaintiff is seeking ownership of nearly 40,000 Bitcoin wallets that haven’t shown on-chain activity in years. The Digital Chamber’s brief argues that accepting such a theory would effectively criminalize inactivity, turning every long-term holder, cold-storage user, and estate planner into a potential target for state seizure. (Lexology)

The case took a sharp turn on May 29, 2026. New York attorney Ian Cohen requested permission to submit an amicus curiae brief challenging the premise that dormant wallets constitute abandoned property; a Blockchair report dated June 6, 2026 confirmed that Cohen’s arguments led a judge to pause the default judgment process, staying proceedings while the court considers the broader implications. The Digital Chamber’s subsequent filing reinforces that position. It warns, flatly, that a ruling for the plaintiff would send dangerous ripples far beyond these specific wallets. (Blockchair)

The stakes are concrete — and they got sharper recently. A separate CoinTelegraph report noted that dormant Bitcoin worth approximately $1.9 million tied to the New York lawsuit moved on-chain after nearly 15 years of inactivity, a detail that crystallizes the tension between long-term holding and the legal theory of abandonment. If a wallet sitting untouched for a decade and a half can be claimed by a third party through state courts, the Digital Chamber argues, the entire promise of self-custody collapses. Users would face pressure to periodically move funds just to prove they haven’t “abandoned” them — a burden that directly contradicts Bitcoin’s core design principles. (CoinTelegraph)

The Digital Chamber is no stranger to high-stakes crypto litigation. The advocacy group has filed amicus briefs in major cases including SEC v. Coinbase and SEC v. Balina, consistently pushing courts to recognize the distinction between custodial and self-custodial arrangements. The organization was also publicly disappointed when the Southern District of New York declined to accept amicus briefs in the Samourai Wallet prosecution — a case that similarly touched on whether privacy-preserving self-custody tools can be treated as criminal infrastructure. Its intervention in the Lost Bitcoin case fits a clear pattern: targeting legal theories that, if accepted, would make self-custody legally precarious.

Then there’s the market backdrop, which adds a layer of irony to the whole dispute. Bitcoin is trading at $63,203, up 0.96% over 24 hours and 6.72% over the past seven days, with a market cap of $1,267.72 billion. BTC dominance stands at 55.8% of the total crypto market cap of $2,271.96 billion. Yet the Fear & Greed Index sits at 27 out of 100 — squarely in “Fear” territory — indicating that despite weekly gains, market participants remain cautious. Long-term holders who have weathered multiple cycles are now being told by a New York lawsuit that their patience might be legally reinterpreted as abandonment.

The case also raises uncomfortable questions about who benefits from classifying dormant wallets as abandoned property. If the plaintiff succeeds, the mechanism would create a pipeline for private parties to claim wallets through state courts — effectively a legal form of wallet-draining sanctioned by the judiciary. The Digital Chamber’s brief pushes back on that framework directly, arguing that blockchain’s pseudonymous design means wallet inactivity cannot be equated with intent to abandon, and that imposing such a standard would require courts to make determinations they are simply not equipped to make.

For now, the June 5 stay buys time. The court has not ruled on the merits, and the Digital Chamber’s amicus brief adds institutional weight to the argument that self-custody rights cannot be conditioned on transaction frequency. Next up: the court’s decision on whether to accept the amicus filings and, ultimately, whether to dismiss the case outright or let it proceed — a ruling that would reverberate across every self-custodial wallet user in the country, not just the 39,069 at the center of this dispute.