The Bitcoin Policy Institute has entered a New York court case that seeks to classify long-held, self-custodied bitcoin as abandoned property, a legal theory that could set a dangerous precedent for every Bitcoin holder who stores coins in their own wallet.
The Bitcoin Policy Institute has entered a New York court case that seeks to classify long-held, self-custodied bitcoin as abandoned property, a legal theory that could set a dangerous precedent for every Bitcoin holder who stores coins in their own wallet.
A lawsuit filed in New York County Supreme Court targets dormant bitcoin believed to be associated with Bitcoin’s earliest days. The case advances an abandoned-property theory, arguing that bitcoin held in self-custody without recent on-chain movement should be treated as unclaimed property under New York law, according to a Crypto Briefing report on the filing. For related coverage, see U.S. Spot Bitcoin ETFs See $90.44M Inflows, Ethereum ETFs Add $18.43M.
The Bitcoin Policy Institute is not merely commenting on the case. BPI has formally joined the legal challenge, filing to block the lawsuit’s core claim. The case is tracked on the New York State Courts Electronic Filing system, though full docket documents remain difficult to access at scale. For related coverage, see Kraken Plans Mobile App Rebuild Around AI Trading Agents.
The distinction matters: this is not about bitcoin sitting on an exchange or held by a custodian. The abandoned-property claim targets coins in self-custody, where a private key holder simply chose not to move their funds. As broader legislative efforts like the Crypto Clarity Act attempt to bring regulatory structure to digital assets, this case tests whether existing property law can override a holder’s right to leave bitcoin untouched.
Traditional abandoned-property statutes were designed for bank accounts and safe deposit boxes, assets held by intermediaries who can report inactivity. Self-custodied bitcoin has no intermediary. A wallet with no transactions for a decade may belong to someone who simply has no reason to move their coins.
Galaxy Research has examined the broader implications of the case, including its connection to early bitcoin associated with the so-called Patoshi pattern, according to a Galaxy research analysis. The key legal question is whether inactivity on the blockchain constitutes abandonment, or whether holding bitcoin in a private wallet is itself an act of custody.
If a court rules that dormant UTXOs can be seized as abandoned property, the precedent would extend far beyond this single case. Millions of bitcoin sit in wallets that have not transacted in years. Long-term holders, often called “HODLers,” deliberately avoid moving coins. A ruling that equates inactivity with abandonment would fundamentally threaten Bitcoin’s value proposition as a self-sovereign store of value.
The distinction between coins that are inaccessible (lost keys) and coins that are simply unmoved (deliberate holding) is central to BPI’s argument. Under existing property law, a homeowner who leaves a house vacant for years does not forfeit ownership. BPI’s position is that the same logic applies to bitcoin held in self-custody.
The next phase depends on court filings and responses from both sides. The NYSCEF docket is the primary document source, though automated access to the filings has proven unreliable during the research phase for this story.
Key documents to monitor include any response from the plaintiff to BPI’s intervention, potential amicus briefs from other industry participants, and any ruling on the threshold legal question of whether self-custodied bitcoin can be classified as abandoned. These filings will determine whether the case proceeds to substantive arguments or is dismissed on the property-rights question alone.
As legal leadership shifts across the crypto industry, the outcome of this case could shape how courts nationwide treat dormant digital assets. No price impact has been observed in connection with the case, and any forward-looking claims about Bitcoin’s market response would be speculative at this stage.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
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