Dormant Bitcoin Address Reawakens During Crypto Lawsuit

A Bitcoin address that was dormant for 15 years transferred $1.88 million on Saturday (July 4), Cointelegraph reported Monday (July 6).

Bitcoin address “1KV47” made its first outgoing transfer since August 2011, according to the report, which cited data from Galaxy Research.

The address is one of 39,069 listed in a New York lawsuit filed by “Noah Doe” and two Wyoming-based companies seeking ownership of dormant Bitcoin holdings, the report said. The lawsuit could test how inactive cryptocurrency holdings are viewed under New York’s lost-property law.

The addresses include those associated with Bitcoin creator Satoshi Nakamoto and together hold an estimated 3.7 million BTC, which is worth about $234 billion, according to the report.

A defendant identifying themselves as “John Doe 33,” who claims to control one of the dormant Bitcoin addresses, filed a motion last week to dismiss the suit, saying Bitcoin addresses are strings of data and can’t be sued.

Edwin Mata, lawyer and CEO of tokenization platform Brickken, said in the report that the court has jurisdiction over rights to intangible property, but it cannot convert public addresses into “found” property simply because the plaintiff copied these addresses to a hard drive.

“The core flaw is that inactivity is not abandonment,” he said, per the report. “Under property law, abandonment generally requires intent to relinquish rights, and a dormant Bitcoin address proves none of that.”

Meanwhile, a June announcement that dozens of companies from FinTech, financial services and institutional crypto joined a consortium called Open Standard to introduce a new dollar-backed stablecoin, Open USD (OUSD), shows that stablecoin issuers and crypto exchanges have diverged from “their once-parallel paths,” PYMNTS reported Wednesday (July 1).

Coinbase and Circle’s 2018 partnership to launch the USDC stablecoin, for example, positioned the new token as a regulated alternative to Tether’s USDT.

“The crypto firms’ incentives were unusually aligned because Coinbase shared directly in USDC’s economics and still does,” PYMNTS wrote.

Reserve income from USDC contributed to Coinbase’s profitability, and over time, the USDC stablecoin evolved from a customer acquisition tool into one of Coinbase’s most crucial sources of revenue.

“Coinbase, however, is also one of the OUSD consortium members,” the report said. “Circle is not. Fast forward to today, and Coinbase’s share price is up around 10% on the news of the OUSD initiative, while Circle’s fell nearly 16% … after the announcement.”