Ripple’s former chief technology officer, David Schwartz, has publicly condemned a legal action filed in New York that aims to seize control of billions of dollars in dormant Bitcoin wallets, including those tied to Bitcoin’s creator, Satoshi Nakamoto, and funds stolen from the Mt. Gox exchange.
The lawsuit, brought by a plaintiff using the pseudonym Noah Doe alongside two Wyoming-based entities, seeks to claim ownership of 39,069 inactive wallets holding an estimated 3.7 million BTC—valued at roughly $286 billion. The plaintiffs argue that the Bitcoin constitutes abandoned property under New York law, claiming the original owners lost access due to a technical flaw.
In his critique, Schwartz highlighted a major jurisdictional flaw: the court’s authority over wallets spread across a decentralized network is dubious. He noted that the lawsuit’s claim that the property is “situated here” in New York is legally weak and “comically bad.” Despite this, he warned that a favorable ruling could still create headaches. Exchanges might feel pressured to freeze funds if they move through U.S. platforms, and procedural delays could make it hard to overturn a legally questionable decision.
Schwartz emphasized that while the ruling should be considered void from the start, the passage of time could allow plaintiffs to “wind up stealing people’s crypto” if courts find the claim of voidness defaulted. He urged the crypto industry to monitor the case closely.
This isn’t the first time Schwartz has weighed in on crypto policy debates. He recently debated staking rewards taxation and has commented on XRP Ledger amendments. Meanwhile, others like Paul Sztorc have faced backlash over proposals that could put Satoshi’s coins at risk.