A new federal bill aims to stop dormant crypto from being swept up as abandoned property — and it lands right as a lawsuit tries to claim 3.8 million Bitcoin under New York's lost-property law. The CLARITY Act's Section 20216, added in the July 22 draft, would protect self-custodied digital assets from escheatment based solely on years of wallet inactivity. The provision directly undercuts the legal theory behind the Noah Doe case, though it may not kill the suit entirely.
A claim on 3.8 million Bitcoin
The lawsuit, filed by a plaintiff identified as Noah Doe, argues that roughly 3.8 million Bitcoin — nearly 18% of the total supply — qualifies as lost property under New York's Article 7-B, Section 257. The claim rests on wallet inactivity, OP_RETURN notices, a press release, and a public claim window. If successful, it would transfer ownership of coins that have sat untouched for years, many of them likely belonging to early miners or forgotten holders.
Self-custody gets a shield
Section 20216 of the CLARITY Act draft defines self-custodied digital assets as those where the owner holds the private keys without a custodian. It overrides any state or local law that treats years of wallet inactivity alone as grounds for transferring ownership. That means a court applying New York's abandoned-property statute couldn't rely on dormancy to seize self-custodied coins. The bill does preserve state unclaimed-property laws for custodial holdings — assets sitting on exchanges or with brokers could still be subject to escheatment.
Where the bill falls short
The provision targets dormancy-based claims, but the Noah Doe lawsuit may not rest on inactivity alone. The plaintiff has cited OP_RETURN messages, police reports, and a formal claim process as additional evidence that the coins are lost. If a court finds those factors sufficient, the CLARITY Act's shield might not apply. The bill's language is clear on inactivity, but it doesn't explicitly bar claims built on a broader evidentiary record.
What comes next
The CLARITY Act evolved from earlier Senate drafts on May 8 and May 20 to the July 22 version that includes Section 20216. The bill now heads to committee, where lawmakers will weigh its impact on state unclaimed-property regimes. Meanwhile, the Noah Doe case moves forward — and the court will have to decide whether the new federal standard, if enacted, would retroactively affect the claim. That question alone could keep lawyers busy for months.
