A provision in the July 22 CLARITY draft would stop self-custodied Bitcoin from being treated as abandoned property because a wallet sat untouched for years. Section 20216 targets the mechanism behind a lawsuit claiming title to 39,069 dormant addresses holding roughly 3.799 million BTC. Coins held at exchanges and brokers stay under state unclaimed-property rules.
Section 20216 of the latest CLARITY draft states that a self-custodied digital asset cannot become abandoned, unclaimed, or forfeited, and cannot become subject to adverse possession or finder's title, solely because its owner has not moved it or otherwise shown continued interest. The language overrides state and local laws that treat years of wallet inactivity alone as grounds for transferring ownership to someone else.
The July 22 draft moves from wallet access to property title
The May 8 and May 20 Senate drafts protected only the ability to hold a self-hosted wallet. The newer version extends into property law, covering whether a person still owns the coins inside that wallet once years of silence go by.
That scope rests on a definition: the section treats a digital asset as self-custodied when the owner keeps exclusive control of the private keys without relying on a custodian, exchange or intermediary. Courts would therefore have to separate coins a person controls directly from coins sitting with an exchange, broker, or custodian. The federal shield goes to the first group, while state unclaimed-property rules keep governing the second, since the draft expressly preserves them for custodial holdings.
The lawsuit claiming 3.799 million dormant BTC
New York's own lost-property law shows why the provision has teeth now. Article 7-B of the state's Personal Property Law covers property that someone loses and later turns over to police, and Section 257 lets title vest in the finder under specific conditions, including for property under $10 once a year of failed efforts to find the owner has gone by.
Noah Doe and two companies are using that framework to claim title to 39,069 dormant Bitcoin addresses holding roughly 3.799 million BTC, nearly 18% of Bitcoin's total supply. Their filing points to an OP_RETURN notice campaign, a press release, and a claim window as evidence that the coins count as lost property nobody came forward to reclaim. Because the theory leans on the wallets' silence, Section 20216 targets that mechanism: a claimant could no longer point to years of inactivity as the basis for taking title under state abandoned-property law.
What Section 20216 leaves for courts to decide
The plaintiffs also cite police reports and attempts to contact possible owners, alongside the OP_RETURN notices. That evidence goes beyond pure dormancy, and it could let them argue their claim rests on more than silence alone even if CLARITY becomes law.
Whether the shield holds depends on Senate negotiation. If the preemption language survives intact and courts read solely due to inactivity narrowly, dormancy-based theories like the one behind Noah Doe become far harder to build. If negotiators strip or soften the section, courts are left to weigh inactivity alongside other factors when deciding a claim.
Either way, Section 20216 removes the single easiest argument a claimant could make against a silent Bitcoin address: that years of nothing happening amounts to abandonment on its own.
Source: CryptoSlate
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