Written by: Frank Corva
Translated by: Chopper, Foresight News
The U.S. Marshals Service (USMS) appears to have liquidated the Bitcoin submitted by Samourai wallet developer Keonne Rodriguez and William Lonergan Hill, which is valued at $6.3 million and is part of the plea agreement between the two.
This action is suspected of violating Executive Order 14233. The order stipulates that Bitcoin obtained by the government through criminal or civil asset forfeiture procedures should be held in the U.S. Strategic Bitcoin Reserve rather than liquidated.
If the federal district court for the Southern District of New York, which is handling the Samourai case, indeed violated Executive Order 14233, this would not be the first time staff at that court have defied federal government directives.
Where Did This Batch of Bitcoin Go?
Bitcoin Magazine obtained a previously undisclosed Asset Liquidation Agreement document. The document indicates 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 was valued at approximately $6.36 million on the final signing date of the agreement, November 3, 2025.
On November 3, 2025, this batch of Bitcoin was transferred from the address bc1q4pntkz06z7xxvdcers09cyjqz5gf8ut4pua22r, but it does not appear to have entered the U.S. Marshals Service's direct custody account; instead, it was directly transferred to the Coinbase Prime wallet address 3Lz5ULL7nG7vv6nwc8kNnbjDmSnawKS3n8, presumably for liquidation.
Currently, the balance of that Coinbase Prime address has been zeroed out, indicating that this batch of Bitcoin has likely been sold.
Violation of Executive Order 14233
Once the U.S. Marshals Service confirms the sale of this seized Bitcoin, it constitutes a violation of Executive Order 14233. The order explicitly states that Bitcoin obtained through criminal forfeiture procedures "shall not be sold" and must be included in the U.S. Strategic Bitcoin Reserve.
The U.S. Marshals Service's sale of Bitcoin is based on its own discretion rather than a legal mandate. This phenomenon suggests that some personnel within the Department of Justice may still view Bitcoin as a "taboo asset," eager to liquidate it rather than treating it as a strategic asset that President Trump has called for government agencies to hold.
It is noteworthy that the investigation and prosecution against Samourai began during the previous administration, which held a strong hostility towards non-custodial cryptocurrency tools and their developers. Therefore, the Department of Justice's decision to ignore Executive Order 14233 and insist on selling Bitcoin continues the previous administration's pattern of viewing Bitcoin as an asset that should be quickly cleared from the government's balance sheet.
Legal Details Related to Forfeiture and Liquidation
According to a knowledgeable legal source, the Bitcoin of the Samourai developers was seized under Title 18, Section 982(a)(1) of the U.S. Code. This provision states that any criminal conduct violating Title 18, Section 1960, which prohibits operating an unlicensed money transmitting business, requires the forfeiture of related property to the U.S. government.
Combining Title 18, Section 982, and its reference to Title 21, Section 853(c) (a criminal forfeiture regulation stating that "property transferred to persons other than the defendant may be forfeited by special forfeiture order and subsequently ordered to be turned over to the U.S. government"), the Bitcoin seized from Rodriguez and Hill fully aligns with the definition of "government Bitcoin" in Executive Order 14233.
Neither Title 18, Section 982, nor its referenced Title 21, Section 853, mandates the liquidation of property subject to criminal forfeiture. Furthermore, the two asset management regulations cited in Section 3 of Executive Order 14233, Title 31, Section 9705, and Title 28, Section 524(c), only regulate the accounts and usage of forfeited funds and do not require the conversion of seized Bitcoin into fiat currency.
The executive order also clearly states that "government Bitcoin" falls under the category of "government digital assets" and stipulates that "heads of agencies shall not sell or otherwise dispose of any government digital assets," with exceptions only in specific circumstances. The cases of Rodriguez and Hill do not meet any exceptions; and in all exceptions, the U.S. Attorney General must be involved in the decision-making regarding the disposal of seized digital assets.
The "Independent" Southern District Federal Court of New York
In light of Executive Order 14233 and the regulations cited in this article, the actions of the Southern District Federal Court of New York clearly violate the core requirement of the executive order to "transfer criminally forfeited Bitcoin to the U.S. Strategic Bitcoin Reserve."
This is not the first instance of such defiance from that court.
Often referred to as the "New York Sovereign District Court," this judicial jurisdiction is known for its independent and arbitrary actions, frequently operating outside of federal oversight even while within the federal judicial system.
The court's insistence on advancing the lawsuits against Rodriguez, Hill, and Tornado Cash developer Roman Storm is further evidence of its disregard for norms.
On April 7, 2025, Deputy Attorney General Todd Blanche issued a memorandum titled "Ending the Punitive Management Model," clearly stating that "the Department of Justice will no longer initiate charges against virtual currency exchanges, mixing services, and developers of offline wallets based on the actions of end users…"
However, the Southern District Federal Court of New York ignored this core spirit of the memorandum and continued to forcefully advance the cases related to the Samourai wallet and Tornado Cash.
More concerning is that Hill and Rodriguez's defense team had applied based on the Brady Rule (which requires the prosecution to disclose exculpatory evidence to the defense), and the documents obtained ultimately showed that two senior officials from the Financial Crimes Enforcement Network of the U.S. Treasury had explicitly stated that due to the non-custodial nature of the Samourai wallet, it does not constitute a money transmitting business. Nevertheless, the prosecution insisted on pursuing the case.
In criminal cases heard in 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 Federal Court of New York is known for its significantly higher win rate than the federal average.
Rodriguez is well aware of such data, and he also knows that the judge presiding over his and Hill's case, Denise Cote, is known for her harsh sentencing.
Just the morning before he admitted to the charge of "conspiring to operate an unlicensed money transmitting business," Rodriguez confided in me about all of this.
Is the Cryptocurrency War Really Over?
In the 2024 election, many Bitcoin and cryptocurrency supporters cast their votes for President Trump, and the cryptocurrency industry had fully supported his re-election campaign. Now, these supporters and industry figures are questioning: Does President Trump really intend to end this war against cryptocurrency?
To achieve this goal, the Department of Justice under the Trump administration must strictly adhere to the requirements of Executive Order 14233 and follow Deputy Attorney General Blanche's guidelines to cease prosecutions against non-custodial cryptocurrency technology developers. Regarding the latter, President Trump has recently indicated that he is considering pardoning Rodriguez.
Pardoning Rodriguez and ordering the Department of Justice to thoroughly investigate the sale of the seized Bitcoin from the Samourai developers would send a strong signal that the president's support for Bitcoin and cryptocurrency is serious and steadfast.
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