It appears that the U.S. Marshals Service (USMS) has liquidated approximately $6.3 million worth of bitcoin, which was paid by Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill to the U.S. Department of Justice (DOJ) as part of their guilty plea settlement.
This action may have breached Executive Order 14233, which requires that any bitcoin seized through criminal or civil asset forfeiture be retained within the United States’ Strategic Bitcoin Reserve (SBR).
If the Southern District of New York (SDNY)—the federal jurisdiction overseeing the Samourai case—indeed violated EO 14233, it would not be unprecedented for SDNY personnel to act contrary to federal government directives.
Where Did The Bitcoin Go?
An exclusive document titled “Asset Liquidation Agreement,” obtained by Bitcoin Magazine but previously unreleased, reveals that the forfeited bitcoin from Rodriguez and Hill was intended for sale—or possibly already sold.
The agreement shows that on November 3, 2025, Assistant United States Attorney Cecilia Vogel signed off on transferring $6,367,139.69 worth of bitcoin—equivalent to roughly 57.55353033 BTC at that time—to USMS custody.
However, instead of being held directly by USMS wallets after being sent from address bc1q4pntkz06z7xxvdcers09cyjqz5gf8ut4pua22r on November 3rd, these bitcoins appear to have been transferred straight into a Coinbase Prime account with address 3Lz5ULL7nG7vv6nwc8kNnbjDmSnawKS3n8—a wallet linked by Arkham Intelligence to a brokerage service—likely for liquidation purposes.
The current zero balance in this Coinbase Prime wallet suggests these bitcoins have already been converted or moved elsewhere.
Potential Breach Of Executive Order 14233
If USMS proceeded with selling this confiscated cryptocurrency without adhering strictly to EO 14233’s provisions—which explicitly prohibit selling “Government BTC” acquired via criminal forfeiture—it would represent a clear violation since such assets are mandated to remain within the Strategic Bitcoin Reserve.
This unauthorized sale implies certain DOJ officials might still regard bitcoin as an undesirable asset better disposed of rather than preserved strategically as directed under President Trump’s executive order.
The prosecution against Samourai Wallet developers originated during an administration known for its adversarial stance toward decentralized crypto tools and their creators; thus ignoring EO mandates aligns with past tendencies treating seized cryptocurrencies as liabilities rather than valuable holdings worthy of retention.
Legal Framework Surrounding Forfeiture And Disposal
A legal insider familiar with this matter confirmed Rodriguez and Hill relinquished their bitcoins under Title 18 U.S.C § 982(a)(1), which demands forfeiture related to violations involving unlicensed money transmission businesses per Title 18 U.S.C § 1960.
This statute incorporates provisions from Title 21 U.S.C § 853(c), allowing property transferred away from defendants post-verdict also be ordered forfeited officially in favor of the United States—thus categorizing such assets clearly under “Government BTC” per EO definitions.
Neither Section §982 nor its incorporated statutes mandate immediate liquidation; moreover, referenced fund-forfeiture laws like §§31 U.S.C.9705 &28 U.S.C.524(c) govern allocation and usage but do not compel converting digital assets into cash instead of holding them intact in-kind form within government reserves.
The executive order further clarifies all “Government Digital Assets,” including Government BTCs must not be sold or otherwise disposed except under narrowly defined circumstances requiring attorney general involvement—not applicable here regarding Rodriguez or Hill’s cases.
The Independent Nature Of The Southern District Of New York
Taking into account EO 14233 alongside relevant statutes indicates SDNY acted countermanding federal policy aimed at preserving seized cryptocurrency within SBR holdings rather than liquidating it prematurely or without authorization.’
This behavior is consistent with SDNY’s reputation: often dubbed “Sovereign District Of New York,” it has frequently operated autonomously despite belonging firmly inside America’s federal judiciary system.
Their pursuit against both Samourai Wallet founders and Tornado Cash developer Roman Storm exemplifies this independent streak.
Notably,on April seventh ,2025 Deputy Attorney General Todd Blanche issued guidance titled “Ending Regulation By Prosecution,” instructing DOJ staff no longer target virtual currency exchanges,mixing services,and offline wallets based solely upon users’ activities.
Despite this directive,the SDNY continued prosecutorial actions against both aforementioned crypto projects.
Even when defense teams revealed internal FinCEN communications suggesting noncustodial nature exempted Samourai Wallet from money transmitter classification,the prosecutions pressed forward regardless.
Federal Conviction Rates And Judicial Severity In Context
Within federal courts overall ,over ninety percent defendants face conviction,sentencing rates sometimes nearing one hundred percent while acquittals hover below one percent.Some reports indicate even higher success rates specifically associated with SDNY prosecutors .
Rodriguez himself acknowledged these daunting odds along with Judge Denise Cote’s reputation —the presiding judge over his trial—for imposing stringent sentences.He expressed awareness just before entering his guilty plea concerning conspiracy charges tied to operating an unlicensed money transmitting business .
Is The Crypto Crackdown Truly Over?
Many supporters across Bitcoin communities who backed President Trump during his reelection campaign now question whether he genuinely intends ending governmental hostility towards cryptocurrencies.To realize peace between regulators & crypto innovators,the DOJ must comply fully with Executive Order #14233 while embracing Deputy AG Blanche’s instructions halting prosecutions targeting noncustodial technologies’ developers .
Recently,POTUS hinted at considering pardoning Rodriguez.A pardon coupled with investigating why DOJ authorized selling confiscated bitcoins could strongly signal Trump’s commitment toward fostering pro-Bitcoin policies moving forward .
This article originally appeared on Bitcoin Magazine authored by Shinobi.