Will the US police department's sale of confiscated Bitcoin violate the Trump executive order?

Written by: Frank Corva

Translated by: Chopper, Foresight News

The US Marshals Service (USMS) appears to have liquidated the Bitcoin developed by Samourai Wallet developer Keonne Rodriguez and William Lonergan Hill. This batch of Bitcoin, valued at $6.3 million, is part of their plea agreement.

This action allegedly violates Executive Order No. 14233. The order stipulates that Bitcoin obtained through criminal or civil asset forfeiture procedures by the government should be held in the U.S. Strategic Bitcoin Reserve, not liquidated.

If the Southern District of New York federal court handling the Samourai case indeed violated Executive Order No. 14233, it would not be the first time court staff have disobeyed federal directives.

Where did this batch of Bitcoin go?

Foresight News obtained an unpublished Asset Liquidation Agreement document. The document shows that the Bitcoin seized from Rodriguez and Hill was either about to be sold or has already been liquidated.

According to the agreement, the two defendants agreed to transfer 57.5 BTC to the US Marshals Service. As of the final signing date, November 3, 2025, this Bitcoin was valued at approximately $6.36 million.

On November 3, 2025, this batch of Bitcoin was transferred from address bc1q4pntkz06z7xxvdcers09cyjqz5gf8ut4pua22r, but it does not appear to have gone directly into the US Marshals Service custody account. Instead, it was transferred directly to a Coinbase Prime wallet address 3Lz5ULL7nG7vv6nwc8kNnbjDmSnawKS3n8, presumably for liquidation.

Currently, the Coinbase Prime address balance is zero, indicating that this batch of Bitcoin has most likely been sold.

Violation of Executive Order No. 14233

Once the US Marshals Service confirms the sale of this seized Bitcoin, it would constitute a breach of Executive Order No. 14233. The order explicitly states that Bitcoin obtained through criminal forfeiture must not be sold and must be included in the U.S. Strategic Bitcoin Reserve.

The US Marshals Service’s sale of Bitcoin was based on its discretion, not legal obligation. This phenomenon suggests that some officials in the Department of Justice may still view Bitcoin as a “taboo asset” and are eager to liquidate it, rather than treating it as a strategic asset that President Trump instructed government agencies to hold.

It is worth noting that the investigation and prosecution of Samourai began during the previous administration. At that time, the government held a strong hostility towards non-custodial cryptocurrency tools and their developers. Therefore, the DOJ’s disregard for Executive Order No. 14233 and its decision to sell Bitcoin continues the previous administration’s approach, viewing Bitcoin as an asset that should be quickly removed from the government’s balance sheet.

Legal details related to seizure and liquidation

According to an informed legal source, the Bitcoin associated with the Samourai developer was seized under 18 U.S. Code § 982 (a)(1). This section states that any property involved in violations of 18 U.S. Code § 1960, which prohibits unlicensed money transmitting businesses, must be forfeited and turned over to the U.S. government.

Combining 18 U.S. Code § 982 and its reference to 21 U.S. Code § 853 ©, a criminal forfeiture regulation that states “property transferred to persons other than the defendant may be forfeited through a special forfeiture order and subsequently ordered to be turned over to the U.S. government,” the seized Bitcoin from Rodriguez and Hill fully meets the definition of “government Bitcoin” in Executive Order No. 14233.

Neither 18 U.S. Code § 982 nor its referenced 21 U.S. Code § 853 require the forfeited property to be liquidated. Additionally, the two forfeiture fund management regulations cited in Article 3 of Executive Order No. 14233, 31 U.S. Code § 9705 and 28 U.S. Code § 524 ©, only regulate the storage accounts and usage of forfeited funds, not the conversion of forfeited Bitcoin into fiat currency.

The order also explicitly states that “government Bitcoin” falls under the category of “government digital assets,” and stipulates that “agency heads shall not sell or otherwise dispose of any government digital assets,” except in specific circumstances. The cases of Rodriguez and Hill do not meet any exceptions; moreover, in all exceptions, the U.S. Attorney General must participate in decisions regarding the disposal of digital assets.

The “independent” Southern District of New York federal court

Based on Executive Order No. 14233 and the regulations cited herein, the actions of the Southern District of New York federal court clearly violate the core requirement of “transferring criminally forfeited Bitcoin to the U.S. Strategic Bitcoin Reserve.”

And this is not the first time this court has shown such defiance.

This jurisdiction, often mockingly called the “New York Sovereign District Court,” is known for its independent and autocratic conduct. Even within the federal judicial system, it often operates outside of oversight.

Its persistent pursuit of lawsuits against Rodriguez, Hill, and Tornado Cash developer Roman Storm is yet another testament to its willful independence.

On April 7, 2025, Deputy Attorney General Todd Blanche issued a memo titled “Ending the Penalty-Driven Custody Model,” which explicitly states that “the Department of Justice will no longer bring charges against virtual currency exchanges, mixing services, or developers of offline wallets based solely on end-user conduct…”

However, the Southern District of New York federal court ignored this core guidance and continued to push forward with the cases related to Samourai Wallet and Tornado Cash.

Even more noteworthy, Hill and Rodriguez’s defense teams filed motions based on the Brady rule (requiring the prosecution to disclose exculpatory evidence), and the documents obtained showed that two senior officials from the Financial Crimes Enforcement Network (FinCEN) explicitly stated that, due to the non-custodial nature of Samourai Wallet, it does not constitute a money transmission business. Despite this, the prosecution insisted on proceeding with the lawsuit.

In criminal cases within the U.S. federal court system, over 90% of defendants are ultimately convicted, with some years seeing acquittal rates as low as 0.4%. The prosecution team in the Southern District of New York is known for its exceptionally high conviction rate, far exceeding the federal average.

Rodriguez is well aware of these statistics, and he also knows that Judge Denise Cote, who presides over his and Hill’s cases, is known for her harsh sentencing.

The morning before he pleaded guilty to “conspiring to operate an unlicensed money transmitting business,” Rodriguez confided all this to the author.

Has the cryptocurrency war really ended?

In the 2024 election, many Bitcoin and crypto supporters voted for President Trump, and the industry once rallied behind his re-election campaign. Now, these supporters and industry insiders are questioning: Does President Trump truly intend to end the war against cryptocurrencies?

To achieve this, the Justice Department under Trump’s leadership must strictly adhere to the requirements of Executive Order No. 14233 and follow Deputy Attorney General Blanche’s guidelines, ceasing prosecutions of non-custodial crypto developers. Recently, President Trump also indicated he is considering pardoning Rodriguez.

Pardoning Rodriguez and ordering the DOJ to investigate the sale of the seized Bitcoin from Samourai developers would send a strong signal, demonstrating that the President’s stance in support of Bitcoin and cryptocurrencies is serious and resolute.