- USMS sold $6.3M in forfeited bitcoin, possibly violating EO 14233 on Strategic Bitcoin Reserve holdings.
- SDNY has a history of ignoring federal guidance in crypto cases, including Samourai Wallet and Tornado Cash prosecutions.
- President Trump’s potential pardon and DOJ review could signal a renewed pro-Bitcoin and crypto-friendly stance.
The U.S. government’s sale of forfeited bitcoin has raised alarm among lawmakers and crypto advocates. Senator Cynthia Lummis voiced concerns after reports indicated the U.S. Marshals Service (USMS) liquidated $6.3 million worth of bitcoin from Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill.
As per the Bitcoin Magazine report, the sale potentially violates Executive Order 14233, which mandates that bitcoin acquired through criminal forfeiture be added to the Strategic Bitcoin Reserve (SBR). The case has reignited debates over the federal government’s stance on digital assets and adherence to presidential directives.
The Bitcoin in question, totaling 57.55353033 BTC, was transferred to the USMS on November 3, 2025, but seemingly bypassed direct custody. Arkham Intelligence reports suggest the funds went straight to a Coinbase Prime address, which currently holds a zero balance.
By doing this, it seems the digital assets have already been sold, which raises serious questions about compliance with EO 14233. Further, critics contend this move reflects a continuing trend in the SDNY of operating unilaterally, usually in complete disregard for federal guidance on cryptocurrency cases.
Legal Framework and Enforcement Issues
Rodriguez and Hill forfeited the Bitcoin under 18 U.S. Code § 982(a)(1) following charges of operating an unlicensed money transmitting business. However, the statutes involved do not require liquidation of forfeited assets.
Moreover, EO 14233 specifically prohibits selling “Government BTC” except under narrowly defined circumstances, none of which applied here. Consequently, the USMS action may reflect a broader DOJ culture still uncomfortable with holding bitcoin as a strategic asset.
SDNY’s Controversial Role
The SDNY has gained a reputation for unilateral actions, often disregarding federal memos like Deputy Attorney General Todd Blanche’s April 2025 guidance to limit crypto prosecutions.
The district proceeded with the Samourai and Tornado Cash cases despite strong indications from FinCEN that the services weren’t violating money transmission laws. Hence, the Bitcoin sale fits a historical pattern of prioritizing enforcement over strategic asset management.
Many crypto supporters now question President Trump’s commitment to ending the federal “war on crypto.” His consideration of pardoning Rodriguez, coupled with potential DOJ reviews of the Bitcoin sale, could send a strong signal. Additionally, these actions would reaffirm the administration’s pro-Bitcoin stance.
