#JusticeDepartmentSellsBitcoin A Silent Power Struggle Behind America’s Bitcoin Strategy

For many cryptocurrency supporters, Donald Trump’s return to the White House signaled the beginning of a new pro-crypto era. His administration openly discussed incorporating Bitcoin into a national strategic reserve, while senior Justice Department officials issued guidance to halt what they described as a regulatory “witch hunt” against non-custodial crypto tools. On the surface, the message seemed clear: the U.S. government was shifting from hostility to cautious adoption. Yet beneath this calm narrative, a quiet institutional conflict has begun to surface.
That conflict became visible when a leaked asset-liquidation document revealed that the U.S. Marshals Service (USMS), acting under instructions tied to prosecutors in the Southern District of New York (SDNY), sold Bitcoin confiscated from the developers of Samourai Wallet. This action directly contradicted the spirit—and arguably the intent—of Executive Order No. 14233, signed by President Trump in March 2025, which framed forfeited Bitcoin as part of a long-term national reserve and explicitly discouraged liquidation.
The case centers on approximately 57.55 BTC, forfeited as part of plea agreements involving Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill. On-chain data shows that in November 2025, these coins were transferred from a government-controlled address to Coinbase Prime, after which the balance was zeroed out. The implication is straightforward: the Bitcoin was sold, not retained for any strategic reserve structure that the administration had publicly promoted.
In isolation, this might appear to be a routine judicial asset sale. In the political and regulatory climate of 2026, however, it carries far greater weight. Trump’s executive order defined Bitcoin obtained through forfeiture as “Government Bitcoin” and emphasized that such assets should be preserved rather than liquidated. The SDNY-directed sale therefore raises a critical question: who ultimately decides the fate of seized digital assets—the executive branch or independent prosecutors?
This brings attention to the unique position of the Southern District of New York, often described as the most autonomous and powerful prosecutorial district in the United States. While formally part of the Department of Justice, SDNY has long operated with a reputation for independence, particularly in financial and crypto-related cases. By proceeding with the Bitcoin sale, SDNY appeared to signal that Washington’s policy direction does not automatically translate into Manhattan’s enforcement behavior.
The move also stood in contrast to an April 2025 memo from Deputy Attorney General Todd Blanche, which stated that the DOJ would no longer pursue cases against non-custodial wallets, mixing tools, or end-users absent clear criminal intent. Despite this guidance, SDNY has continued to press forward with cases tied to Samourai Wallet and the ongoing prosecution of Tornado Cash developer Roman Storm. Even signals from FinCEN suggesting that non-custodial tools may not qualify as money transmitters failed to alter SDNY’s posture.
Legally, SDNY can point to Title 18, Section 982(a)(1) of the U.S. Code, which governs asset forfeiture and grants prosecutors discretion over confiscated property. The statute establishes ownership by the United States but does not explicitly mandate how assets must be managed post-seizure. This legal ambiguity is the heart of the conflict: the law allows discretion, while the executive order imposes strategic intent.
By converting Bitcoin into U.S. dollars, SDNY exercised its discretionary authority in a way that is arguably lawful but politically disruptive. The decision suggests discomfort within parts of the judicial bureaucracy toward holding Bitcoin as a sovereign asset. Rather than allowing confiscated BTC to become part of a national reserve, the preference appeared to be liquidation—removing what some still view as a controversial or “toxic” asset from government balance sheets.
This development places President Trump in a difficult position. Publicly, his administration promotes Bitcoin as a strategic asset and signals openness to pardoning developers involved in non-custodial technologies. Privately, agencies operating under the federal umbrella are taking actions that undermine those goals. Should Trump order an investigation into the sale or intervene directly, it would escalate into a rare and direct confrontation between executive authority and prosecutorial independence.
For the crypto market, the issue goes beyond the sale of 57.55 BTC. The real damage lies in policy inconsistency. Strategic reserves depend not only on asset accumulation but also on institutional alignment and predictability. When one branch of government signals long-term adoption while another quietly liquidates assets, confidence erodes—not just among investors, but among global policymakers watching the U.S. experiment unfold.
The broader lesson is clear: the biggest challenge to establishing Bitcoin as a national reserve asset may not be price volatility or public skepticism, but internal resistance within entrenched power structures. The “Bitcoin war” may no longer be loud or public, but it is far from over. It has simply moved behind closed doors—into memos, plea agreements, and quiet transactions on-chain.
If the United States is serious about a Bitcoin strategic reserve, alignment across executive, regulatory, and judicial institutions will be essential. Otherwise, the greatest threat to crypto adoption at the state level will not come from markets—but from the fractures within government itself.