The US Marshals Service (USSMS) appears to have sold $6.3 million worth of Bitcoin that Samurai Wallet developers Keon Rodriguez and William Lonergan Hill paid to the US Department of Justice (DOJ) as part of their guilty pleas.
Doing so could violate Executive Order (EO) 14233, which requires Bitcoin acquired through criminal or civil asset forfeiture proceedings to be held as part of the U.S. Strategic Bitcoin Reserve (SBR).
If the Southern District of New York (SDNY), where the Samurai case was scheduled to be heard, was in fact in violation of EO 14233, this would not be the first time SDNY officials acted contrary to federal instructions.
What happened to Bitcoin?
Bitcoins confiscated by Rodriguez and Hill will be sold or have already been sold, according to a previously undisclosed document titled “Asset Liquidation Agreement” obtained exclusively by Bitcoin Magazine.
According to the documents, the defendants agreed to transfer $6,367,139.69 worth of Bitcoin to the USMS (57.55353033 Bitcoins at the time the contract was signed by the final party on November 3, 2025). This was Assistant U.S. Attorney Cecilia Forgeron.
The Bitcoin sent from address bc1q4pntkz06z7xxvdcers09cyjqz5gf8ut4pua22r on November 3, 2025 appears to have bypassed direct control by USSMS. Instead, it was sent directly to Coinbase Prime address 3Lz5ULL7nG7vv6nwc8kNnbjDmSnawKS3n8 (which Arkham Intel believes is from a brokerage firm), and likely sold.
This Coinbase Prime address currently has a zero balance, indicating that the Bitcoin may have already been sold.
Violation of Executive Order 14233
If the USMS sells the confiscated Bitcoin, it would likely violate EO 14233, which mandates that Bitcoin acquired by the US government through criminal forfeiture (referred to in the EO as “Government BTC”) “shall not be sold” and should be contributed to the US SBR.
If the USMS sells Bitcoin, they do so at their own discretion, not as a legal mandate. This indicates that some members of the Justice Department may still view Bitcoin as a taboo asset that should be sold, rather than the strategic asset that President Trump has directed the agency to hold.
Given that Samurai’s prosecution began under a previous administration that was notoriously hostile to non-custodial cryptographic tools and their developers, the decision to ignore EO 14233 and sell Bitcoin despite orders from the executive branch fits into a pattern of treating Bitcoin as something that should be removed from government balance sheets as soon as possible.
Legal details regarding forfeiture and liquidation
According to legal sources close to the matter, the Samourai developers have confiscated the Bitcoin under 18 U.S.C. §982(a)(1). The law provides that any crime that violates 18 United States Code § 1960, the law that prohibits the operation of unlicensed money transfer businesses, will result in the person committing the crime to the United States forfeiture of the property involved in the crime.
§ 982 and its incorporated 21 USC § 853(c), which provides that “any property thereafter transferred to a person other than the defendant shall be subject to a special forfeiture judgment and thereafter ordered for forfeiture to the United States,” the Bitcoins forfeited by Rodriguez and Hill fit the definition of an EO. “Government BTC”.
Neither section 982 nor incorporated section 853 requires liquidation of property confiscated as part of a criminal offense. Additionally, the forfeiture laws cited in Section 3 of the EO—31 USC § 9705 and 28 USC § 524(c)—regulate where forfeiture proceeds can be deposited and how they can be used. It does not require confiscated Bitcoins to be exchanged for cash rather than held in physical form.
The EO also provides that “government BTC” falls under the umbrella of “government digital assets,” and states that except in certain scenarios, “the head of each government agency shall not sell or otherwise dispose of any government digital assets.” Neither of these applies to Rodriguez or Hill, and in each case the U.S. Attorney General will play a role in deciding what to do with confiscated digital assets.
Sovereign District of New York
Considering EO 14233 and the statutes cited in this article, it appears that SDNY acted in violation of its EO 14233 obligation to remit Bitcoin acquired through criminal forfeiture to the US SBR.
This is not the first time the SDNY has taken such action.
The jurisdiction, sometimes referred to colloquially as the “Sovereign District of New York,” has a reputation for operating independently and unilaterally, despite being part of the federal system.
Further evidence of this is the fact that the SDNY has moved forward with its case against Rodriguez and Hill, as well as its case against Tornado Cash developer Roman Storm.
On April 7, 2025, Deputy Attorney General Todd Blanche issued a memo titled “Ending Prosecutorial Regulation,” in which he stated that “[the Department]will not subject virtual currency exchanges, mixing and tumbling services, and offline wallets to end-user conduct…”
However, the SDNY appeared to ignore the memo’s language when moving forward with the Samurai Wallet and Tornado Cash cases.
And when Hill and Rodriguez’s attorneys, at Brady’s request, learned that two high-ranking members of the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) “strongly suggested” that Samurai Wallet was not functioning as a money transmitter due to the non-custodial nature of the service, they proceeded with the prosecution anyway.
In criminal cases tried within the federal court system, over 90% of defendants are convicted and sentenced, and in some years only 0.4% are acquitted. And prosecutors in SDNY cases have a reputation for having even higher success rates.
Rodriguez knew these statistics and the fact that Judge Dennis Cote, who presided over his and Hill’s case, had a reputation for harsh sentencing.
He told me as much the morning before pleading guilty to conspiracy to operate an unauthorized money transfer business.
Is the virtual currency war really over?
Many Bitcoin and crypto supporters who voted for President Trump in 2024, as well as the crypto industry that supported him in his re-election, are now beginning to question whether President Trump really wants the crypto wars to end.
To achieve this, the Department of Justice under President Trump must honor the mandate of EO 14233 and follow Deputy Attorney General Blanche’s guidance to cease prosecuting non-custodial cryptography developers.
On the latter point, President Trump recently said he was considering pardoning Rodriguez.
The president’s decision to pardon Rodriguez and at the same time have the Justice Department investigate why Samurai Developers sold confiscated bitcoins will send a signal that the president is serious about his support for bitcoin and cryptocurrencies.
