Has Trump's executive order on a strategic Bitcoin reserve become a dead letter?
Written by: Frank Corva
Compiled by: Chopper, Foresight News
The U.S. Marshals Service (USMS) appears to have completed the realization of the $6.3 million worth of Bitcoin paid by Samourai wallet developers Keonne Rodriguez and William Lonergan Hill as part of their plea agreement.
This action is suspected of violating Executive Order 14233. This order stipulates that Bitcoin acquired by the government through criminal or civil asset forfeiture proceedings should be held in the U.S. Strategic Bitcoin Reserve, rather than being liquidated.
If the U.S. District Court for the Southern District of New York, which is handling the Samourai case, did indeed violate Executive Order 14233, then this is not the first time that court staff have defied federal government directives.
Where did these Bitcoins go?
Bitcoin Magazine obtained a previously unpublished "Asset Liquidation Agreement" document. The document shows that the Bitcoin seized from Rodriguez and Hill is either about to be sold or has already been liquidated.
According to the agreement, the two defendants agreed to transfer 57.5 bitcoins to the U.S. Marshals Service, which would be worth approximately $6.36 million by November 3, 2025, the final date of the agreement.
On November 3, 2025, this batch of Bitcoin was transferred from the address bc1q4pntkz06z7xxvdcers09cyjqz5gf8ut4pua22r, but it does not appear to have entered the direct escrow account of the U.S. Marshals Service. Instead, it was directly transferred to the Coinbase Prime wallet address 3Lz5ULL7nG7vv6nwc8kNnbjDmSnawKS3n8, presumably for the purpose of monetization.
Currently, the Coinbase Prime address has zero balance, which means that this batch of Bitcoins has most likely been sold.
Violation of Executive Order No. 14233
If the U.S. Marshals Service confirms that it has sold the seized Bitcoin, it will constitute a violation of Executive Order 14233. This order explicitly requires that Bitcoin obtained by the government through criminal forfeiture proceedings "must not be sold" and must be added to the U.S. Strategic Bitcoin Reserve.
The U.S. Marshals Service's sale of Bitcoin was based on its own discretion, not on legal mandate. This suggests that some within the Department of Justice may still view Bitcoin as a "taboo asset" and are eager to liquidate it, rather than as a strategic asset that President Trump mandated government agencies hold.
It is worth noting that the investigation and prosecution against Samourai began during the previous administration's term. At that time, the government was highly hostile to non-custodial cryptocurrency instruments and their developers. Therefore, the Department of Justice's decision to disregard Executive Order 14233 and insist on selling Bitcoin continues the consistent approach of previous administrations, treating Bitcoin as an asset that should be removed from the government's balance sheet as soon as possible.
Legal details related to confiscation and liquidation
According to a legal source familiar with the matter, Samourai's Bitcoin was seized under Title 18, Section 982(a)(1) of the United States Code. This section stipulates that any property involved in a violation of Title 18, Section 1960 of the United States Code, which prohibits the operation of an unlicensed money transfer business, must be forfeited and turned over to the U.S. government.
In conjunction with Title 18, Section 982 of the United States Code, and its reference to Title 21, Section 853(c) of the United States Code (a criminal forfeiture statute that states that "property subsequently transferred to persons other than the defendant may be forfeited by a special forfeiture order and subsequently ordered to be turned over to the United States government"), the Bitcoin seized from Rodriguez and Hill fully meets the definition of "government Bitcoin" in Executive Order 14233.
Neither Title 18, Section 982 of the United States Code, nor its cited Title 21, Section 853, mandates the conversion of criminally seized property into cash. Furthermore, the two forfeiture fund regulations cited in Section 3 of Executive Order 14233—Title 31, Section 9705, and Title 28, Section 524(c) of the United States Code—only regulate the storage accounts and usage of forfeited funds, without requiring the conversion of forfeited Bitcoin into fiat currency.
The executive order also explicitly states that "government Bitcoin" falls under the category of "government digital assets" and stipulates that "agency heads may not sell or otherwise dispose of any government digital assets," with exceptions only in specific circumstances. The Rodriguez and Hill case does not fall under any of these exceptions; and in all exceptions, the U.S. Attorney General must be involved in the decision-making process to determine how the confiscated digital assets will be disposed of.
The U.S. District Court for the Southern District of New York, which has its own distinct system
Based on Executive Order 14233 and the various regulations cited in this article, the actions of the U.S. District Court for the Southern District of New York clearly violate the core requirement of the executive order to "transfer criminally seized Bitcoin to the U.S. Strategic Bitcoin Reserve."
This is not the first time such acts of defiance have occurred at the hospital.
This jurisdiction, often jokingly referred to as the "New York Sovereign District Court," is known for its independent and autocratic behavior. Even though it is within the federal judicial system, it often operates outside of its control.
The court's insistence on proceeding with the lawsuits against Rodriguez, Hill, and Tornado Cash developer Roman Storm is yet another testament to its willful behavior.
On April 7, 2025, U.S. Deputy Attorney General Todd Blanche released a memo entitled "Ending the Model of Penalties Instead of Regulatory Measures," which explicitly stated that "the Department of Justice will no longer bring charges against developers of virtual currency exchanges, mixing services, and offline wallets for the actions of end users..."
However, the U.S. District Court for the Southern District of New York disregarded this core principle of the memorandum and continued to forcefully proceed with the trial of cases related to Samourai Wallet and Tornado Cash.
More noteworthy is that Hill and Rodriguez's defense team filed an application based on the Brady Rule (which requires the prosecution to disclose incriminating evidence to the defense). The documents they obtained revealed that two senior officials from the U.S. Treasury Department's Financial Crimes Enforcement Network explicitly stated that, given the non-custodial nature of the Samourai wallet, it did not constitute a money transfer business. Even so, the prosecution insisted on proceeding with the lawsuit.
In criminal cases tried in the U.S. federal court system, over 90% of defendants are ultimately convicted and sentenced, with acquittal rates as low as 0.4% in some years. The prosecution team in the Southern District of New York is renowned for its exceptionally high success rate, far exceeding the federal average.
Rodriguez was well aware of this data, and he also knew that the judge presiding over his case against Hill, Denise Cote, was known for her harsh sentencing.
The morning before he pleaded guilty to "conspiring to operate an unlicensed money transfer business," Rodriguez confessed all of this to the author.
Has the cryptocurrency war really ended?
In the 2024 election, many Bitcoin and cryptocurrency supporters voted for President Trump, and the cryptocurrency industry also fully supported his re-election campaign. Now, these supporters and industry figures are questioning whether President Trump truly intends to end this war against cryptocurrencies.
To achieve this goal, the Department of Justice under the Trump administration must strictly adhere to all requirements of Executive Order 14233, while following the guidelines of Deputy Attorney General Blanche, and cease prosecutions of developers of non-custodial cryptocurrency technology. Regarding the latter, President Trump recently stated that he is considering pardoning Rodriguez.
Pardoning Rodriguez and ordering the Justice Department to thoroughly investigate the sale of Samourai's developers' confiscated Bitcoin will send a strong signal that the president is serious and firm in his support for Bitcoin and cryptocurrencies.
