The US Marshals Service (USMS) seems to have sold Bitcoin valued at $6.3 million, which developers Keon Rodriguez and William Lonergan Hill of Samurai Wallet paid to the Department of Justice (DOJ) as part of their guilty pleas.
This action might actually breach Executive Order (EO) 14233, stipulating that Bitcoins obtained through civil or criminal forfeiture must be preserved as part of the U.S. Strategic Bitcoin Reserve (SBR).
If the Southern District of New York (SDNY)—where the Samurai case was set to be addressed—indeed acted against EO 14233, it wouldn’t be the first time SDNY officials have disregarded federal directives.
What happened to Bitcoin?
Documents, recently obtained by Bitcoin Magazine, indicate that the confiscated Bitcoins linked to Rodriguez and Hill have either been sold or are planned for sale through an “Asset Liquidation Agreement.”
The defendants transferred $6,367,139.69 worth of Bitcoin to the USMS (57.55353033 Bitcoins based on values at the time of the agreement’s final sign-off on November 3, 2025, by Assistant U.S. Attorney Cecilia Forgeron).
The Bitcoin sent from address bc1q4pntkz06z7xxvdcers09cyjqz5gf8ut4pua22r on that date seems to have avoided direct handling by USMS and was routed through a Coinbase Prime address 3Lz5ULL7nG7vv6nwc8kNnbjDmSnawKS3n8 (arkham intel), likely indicating it’s up for sale.
This Coinbase address currently shows a zero balance, suggesting the Bitcoin may have already been disposed of.
Violation of Executive Order 14233
If the USMS proceeds with the sale of the confiscated Bitcoin, it likely conflicts with EO 14233, which mandates that Bitcoin seized through criminal forfeiture (“Government BTC”) should be preserved and added to the US SBR.
The USMS’s decision to sell any Bitcoin would be made independently and not as a lawful obligation, implying some individuals within the Justice Department may still regard Bitcoin as something to be sold off, rather than treated as a strategic asset as directed by President Trump.
Considering that Samurai’s prosecution began under an administration notably unwelcoming towards non-custodial crypto tools and their developers, the disregard for EO 14233 and the decision to sell Bitcoin seems like part of a broader trend to rapidly eliminate Bitcoin from government accounts.
Legal details about forfeiture and liquidation
Legal perspectives suggest the Samourai developers confiscated Bitcoin according to 18 U.S.C. §982(a)(1), which states any crime breaching 18 U.S.C. §1960—prohibiting unlicensed money transfer operations—leads to forfeiture of related property.
The definitions in §982 and 21 USC §853(c) mean that any property transferred to someone other than the offender is subject to forfeiture, classifying the Bitcoins forfeited by Rodriguez and Hill as “Government BTC.”
However, neither §982 nor §853 necessitate that confiscated property be liquidated. Furthermore, the forfeiture laws referenced in the EO—which include 31 USC §9705 and 28 USC §524(c)—regulate how forfeiture proceeds may be managed, without requiring that Bitcoins be converted to cash rather than retained in their original form.
According to the EO, “government BTC” is categorized under “government digital assets,” barring sales except in specific cases, and asserts that heads of government agencies should not sell or otherwise dispose of government digital assets. This doesn’t relate to Rodriguez or Hill, and decisions about confiscated digital assets ultimately rest with the U.S. Attorney General.
Sovereign District of New York
Given EO 14233 and the laws discussed here, it seems that SDNY did not comply with its obligations regarding the remittance of Bitcoin seized through forfeit to the US SBR.
This isn’t the first instance of the SDNY acting in such a manner.
Sometimes called the “Sovereign District of New York,” the jurisdiction is known for operating somewhat independently, diverging from the federal system.
Evidence of this can be seen with SDNY’s ongoing cases against Rodriguez and Hill, alongside its case against Tornado Cash developer Roman Storm.
On April 7, 2025, Deputy Attorney General Todd Blanche released a memo titled “The End of Prosecutorial Regulation,” noting that decisions around end-user activities like virtual currency exchanges and mixing services would no longer be covered.
However, it appears that SDNY overlooked this guidance while engaging with the Samurai Wallet and Tornado Cash cases.
In fact, the defense team of Hill and Rodriguez found out that the prosecution moved forward, despite strong suggestions from officials at the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) indicating that Samurai Wallet wasn’t used for money transfers due to its non-custodial nature.
When looking at federal trials, often, over 90% of defendants get convicted, with a mere 0.4% acquitted. The SDNY’s cases appear to reflect an even higher success rate.
Rodriguez was certainly aware of these statistics, alongside Judge Dennis Cote’s reputation for harsh sentences, which he mentioned just before pleading guilty to conspiracy to operate an unauthorized money transfer business.
Is the virtual currency war really over?
Many Bitcoin and crypto enthusiasts who supported President Trump in 2024, along with the crypto sector, are starting to wonder if he genuinely intends to end the ongoing crypto conflict.
For this to occur, the DOJ under President Trump should respect EO 14233’s directives and heed Deputy Attorney General Blanche’s recommendations to halt prosecutions against non-custodial crypto developers.
On a related note, President Trump recently expressed he might consider pardoning Rodriguez.
Pardoning Rodriguez while simultaneously investigating why the Samurai developers sold confiscated Bitcoins would send a clear message about the president’s seriousness in supporting Bitcoin and cryptocurrencies.
