$293 Billion Bitcoin Dormant Wallets as 'Lost Property'?...David Schwartz "Terrible Claim"

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A massive lawsuit surrounding the ownership of dormant Bitcoin (BTC) wallets worth $293 billion has simultaneously drawn ridicule and skepticism from the cryptocurrency industry. David Schwartz, Ripple's Honorary Chief Technology Officer, directly criticized the legal reasoning of the lawsuit, which invoked New York's lost property laws, calling it "ridiculously terrible."

According to the cryptocurrency media outlet U.Today on May 29 (local time), an anonymous plaintiff filed a lawsuit seeking legal ownership of 39,069 dormant Bitcoin wallets. U.Today reported that the current value of these wallets is approximately $293 billion, which is larger than the entire net worth of Amazon founder Jeff Bezos.

The lawsuit was filed by a New York man under the pseudonym 'Noah Doe' along with two corporate entities. The targets of the lawsuit are self-custody Bitcoin wallets that have shown no on-chain activity for at least five years. The plaintiff claims to have developed a custom algorithmic technique to identify abandoned wallets and submitted the wallet data on a USB drive to the police as lost property.

The plaintiff subsequently sent notices of abandonment to several wallets. As a result, over 400 owners moved their funds, indicating that those wallets were not abandoned, but more than 39,000 wallets showed no movement. The plaintiff has proceeded with the lawsuit, demanding full legal ownership of the remaining wallets.

Schwartz assessed the plaintiff's claims as having serious legal flaws. He stated, "There are many significant legal issues with this lawsuit. First, there is no basis for the court to have jurisdiction. The argument that the property was found in New York State is ridiculously terrible." Alex Thorn, Head of Galaxy Research, also expressed skepticism about the idea of claiming globally distributed Bitcoin holdings under local lost property laws.

U.Today pointed out that it would be unusual for a New York court to transfer legal ownership of approximately $293 billion worth of Bitcoin to three anonymous parties. It is reported that this amount includes coins associated with Satoshi Nakamoto. Schwartz explained that while the Bitcoin network itself is highly unlikely to comply with such demands, there might be room for application in BSV or past/future forks that can reflect court orders at the first layer.

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