The US Marshall Service (USMS) appears to have sold $6.3 million worth of bitcoin that Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill paid the US Department of Justice (DOJ) as a fee as part of their guilty plea.
In doing so, it potentially violated Executive Order (EO) 14233, which mandates that bitcoin acquired through criminal or civil asset forfeiture proceedings be held as part of the United States’ Strategy Bitcoin Reserve (SBR).
If the Southern District of New York (SDNY), the federal judicial district where the Samourai case was to be heard, did in fact violate EO 14233, it would not be the first time that SDNY employees have acted contrary to instructions from the federal government.
What Happened to Bitcoin?
According to a document titled “Asset Liquidation Agreement,” which was obtained exclusively by Bitcoin Magazine and has not been made public until now, the bitcoin that Rodriguez and Hill lost must be sold — or already has been.
According to the document, the defendants agreed to transfer $6,367,139.69 bitcoin – 57,55353033 bitcoin at the time the final party signed the agreement, which was Assistant US Attorney Cecilia Vogelon on November 3, 2025 – to USMS.
The bitcoin, which was sent from the address bc1q4pntkz06z7xxvdcers09cyjqz5gf8ut4pua22r on November 3, 2025, appears to have bypassed any direct custody by the USMS. Instead, it appears to have been sent directly to Coinbase Prime address 3Lz5ULL7nG7vv6nwc8kNnbjDmSnawKS3n8 (Arkham Intel attributes this address to the brokerage), presumably to be sold.
This Coinbase Prime address currently has a zero balance, indicating that the bitcoin has already been sold.
Violation of executive order 14233
If USMS has sold the forfeited bitcoin, it is likely in violation of EO 14233, which mandates that bitcoin acquired by the US government via criminal forfeiture, called “Government BTC” in the EO, “shall not be sold” and must be deposited into the US SBR.
If the USMS sold bitcoin, they did so at their own discretion and not as a legal mandate, indicating that certain members of the DOJ may still see bitcoin as a taboo asset to be shed, as opposed to a strategic asset that President Trump has asked government agencies to keep.
Given that the Samourai prosecution originated under the previous administration, which was notoriously hostile to non-custodial crypto tools and their developers, the decision to ignore EO 14233 and sell bitcoin despite an executive branch mandate fits a pattern of treating bitcoin as something that should be removed from government balance sheets as soon as possible.
Legal details regarding confiscation and liquidation
According to a legal source close to this matter, the Samourai developers forfeited their bitcoin under 18 US Code § 982(a)(1), which states that any offense that violates 18 US Code § 1960, the law prohibiting the operation of unlicensed money transmission businesses, orders that person to forfeit any property involved in the United States.
Judging by § 982 and its incorporation of 21 USC § 853(c), a criminal forfeiture statute that provides that “property subsequently transferred to a person other than the defendant may be subject to a special judgment of forfeiture, and shall thereafter be ordered forfeited to the United States,” the fit the Rodriguez definition of bitcoin and bitcoin “Government BTC”.
Neither section 982 nor the incorporated section 853 require that assets forfeited as part of a criminal offense must be liquidated. Furthermore, the trust forfeiture statutes cited in section three of the EO — 31 USC § 9705 and 28 USC § 524(c) — govern where the proceeds of forfeiture are deposited and how they may be used; they do not require lost bitcoin to be converted to cash instead of being held in kind.
The EO also provides that “Government BTC” falls under the umbrella of “Government Digital Assets” and says that “the head of each agency may not sell or otherwise dispose of any government digital assets” except in certain scenarios, none of which apply in the Rodriguez or Hill cases, and in all of these cases the US Attorney General determines what the digital asset should play a role in determining which digital assets.
The sovereign district of New York
Taking EO 14233 and the statutes cited in this article into consideration, the SDNY appears to have acted in a manner that defies EO 14233’s mandate to transfer bitcoin obtained via criminal forfeiture to the US SBR.
This would not be the first time the SDNY has acted in such a manner.
The judicial jurisdiction, sometimes colloquially referred to as the “Sovereign District of New York”, has earned a reputation for operating independently and unilaterally, despite being part of a federal system.
The fact that the SDNY continued with the cases against Rodriguez and Hill as well as the case against Tornado Cash developer Roman Storm is further proof of this.
On April 7, 2025, Deputy Attorney General Todd Blanche issued a memo titled “Ending Regulation By Prosecution” in which he stated ” Department [of Justice] will no longer target virtual currency exchanges, mixing and tumbling services and offline wallets for the actions of their end users…”
However, the SDNY appeared to ignore the language of this memo as it proceeded with the Samourai Wallet or Tornado Cash cases.
And when the defense team for Hill and Rodriguez learned as per Brady requests that two senior members of the U.S. Treasury Department’s Financial Crimes Network (FinCEN) “strongly suggested” that Samourai Wallet did not serve as a money transmitter because of the service’s non-custodial nature, prosecutors continued anyway.
When it comes to criminal cases handled within the federal court system, over 90% of defendants are convicted and sentenced, while as little as 0.4% are acquitted some years. And the prosecution of SDNY cases has a reputation for having an even higher win rate.
Rodriguez was aware of those statistics, as well as the fact that Judge Denise Cote, the judge who presided over his and Hill’s cases, has a reputation for harsh sentencing.
He told me the same thing the morning before he pleaded guilty to conspiracy to operate an unlicensed money transmitter business.
Is the war on crypto really over?
Many Bitcoin and crypto supporters who voted for President Trump in 2024, as well as the crypto industry who supported the president in his re-election, are now beginning to question whether President Trump really wants to see an end to the war on crypto.
For this to happen, the DOJ under President Trump must honor what is mandated in EO 14233 and follow Deputy Attorney General Blanche’s direction to stop prosecuting developers of non-custodial crypto-technology.
On the latter point, President Trump recently stated that he is considering pardoning Rodriguez.
His pardon of Rodriguez, as well as letting the DOJ investigate why it sold the bitcoin that the Samourai developers lost, would send a signal that the president is quite serious about his pro-Bitcoin and pro-crypto stance.