Federal Bitcoin Sale Sparks Legal Questions
Federal prosecutors in the Southern District of New York, along with the Department of Justice, are facing some serious questions right now. They’re accused of selling millions of dollars in seized Bitcoin, and this move might have directly violated an Executive Order from former President Donald Trump.
It’s about 101 Bitcoins, worth roughly $6.3 million at the time. They came from the case against Samourai Wallet, a privacy-focused cryptocurrency service. The key issue is Executive Order 14233, which Trump signed back in March 2025. That order created something called the U.S. Strategic Bitcoin Reserve. It said, pretty clearly, that all Bitcoin accumulated through federal forfeitures had to be kept as a national reserve asset. Selling it was prohibited.
The Samourai Wallet Forfeiture
The Bitcoin in question was forfeited by Samourai Wallet’s founders, Keonne Rodriguez and William Lonergan Hill. They were arrested in April 2024 on charges of operating an unlicensed money transmitting business and conspiracy to commit money laundering. Prosecutors argued their platform’s privacy tools, Whirlpool and Ricochet, helped facilitate over $237 million in illegal transactions, including funds linked to dark web markets.
In August 2025, Rodriguez and Hill pleaded guilty as part of a deal. A major part of that agreement was giving up 101.213 Bitcoin to the U.S. government. According to a report from Bitcoin Magazine, blockchain data suggests the U.S. Marshals Service—the agency that handles seized DOJ assets—transferred and sold this Bitcoin in late 2025. That’s the sale critics are pointing to as a potential violation.
Not the First Controversy
This isn’t the first time the Southern District’s handling of the Samourai case has caused problems. Earlier in the prosecution, defense lawyers accused prosecutors of suppressing evidence. They filed a motion to dismiss the case in May 2025, alleging prosecutors withheld a 2021 guidance document from FinCEN, the Financial Crimes Enforcement Network.
That internal document reportedly stated that non-custodial services like Samourai Wallet didn’t meet the legal definition of a money transmitting business. The defense argued this was crucial information, and withholding it violated their rights. Coin Center, a crypto policy group, called it a “breakdown in the system,” where prosecutors seemed to ignore guidance from the very agency responsible for anti-money laundering rules.
Community Reaction and What’s Next
Frank Corva, a contributor to Bitcoin Magazine and Forbes, shared the story on social media, and it’s gotten the crypto community talking. People are demanding accountability. Some legal experts think this could lead to an internal review within the Department of Justice or even attract attention from Congress.
There’s a bill, H.R. 3798, introduced in June 2025, that’s expected to turn the President’s Executive Order into a law. That could prevent similar actions in the future. The reported sale also raises questions about the integrity of the Strategic Bitcoin Reserve itself, which is estimated to hold about 210,000 Bitcoin from various forfeitures.
I think the core issue here is about procedure and following established rules. Whether you agree with the executive order or not, if it was in effect, agencies were supposed to follow it. The sale creates a perception problem, at the very least. It makes you wonder about the consistency of enforcement. And in the crypto space, where trust in traditional institutions is already a touchy subject, these kinds of incidents don’t help.
