Did the U.S. Marshals Service sell government BTC?

The U.S. Marshals Service has allegedly sold approximately $6.3 million worth of Bitcoin forfeited by Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill.

Selling the forfeited Bitcoin goes against a presidential executive order that such assets should be added to the nation’s Strategic Bitcoin Reserve.

Did the U.S. Marshals Service sell government BTC?

According to an Asset Liquidation Agreement obtained by Bitcoin Magazine, Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill agreed to transfer 57.55353033 Bitcoins to the USMS as part of their guilty plea with the U.S. Department of Justice. 

Blockchain records show the Bitcoins were transferred from address bc1q4pntkz06z7xxvdcers09cyjqz5gf8ut4pua22r on November 3, 2025 to a Coinbase Prime address identified as 3Lz5ULL7nG7vv6nwc8kNnbjDmSnawKS3n8. This address currently shows a zero balance. 

Executive Order 14233 explicitly states that Bitcoins acquired through criminal or civil asset forfeiture proceedings should not be sold and must be contributed to the United States Strategic Bitcoin Reserve. 

The order defines such assets as “Government BTC” and specifies that agency heads “shall not sell or otherwise dispose of any Government Digital Assets.” The order has exceptions for specific circumstances that so far do not apply to the Rodriguez and Hill cases.

18 U.S. Code § 982(a)(1) requires individuals who violate laws against operating unlicensed money transmitting businesses to forfeit property involved in the offense. Legal experts have noted that neither this statute nor related forfeiture laws actually require that seized Bitcoins be converted to cash. 

Relevant statutes including 31 U.S.C. § 9705 and 28 U.S.C. § 524(c) only state where the forfeited proceeds are deposited and how they may be used.

Did the Southern District of New York ignore existing regulation?

On April 7, 2025, Deputy Attorney General Todd Blanche issued a memo titled “Ending Regulation By Prosecution” which prohibits the Department of Justice from going after virtual currency exchanges, mixing and tumbling services, and offline wallets for the actions of their end users. 

Despite this clear regulation, the Southern District of New York (SDNY) continued pursuing both the Samourai Wallet case and the prosecution of Tornado Cash developer Roman Storm.

The prosecution moved forward even after the defense team learned through a Brady request that two high-ranking members of the Treasury Department’s Financial Crimes Enforcement Network had “strongly suggested” that Samourai Wallet wasn’t functioning as a money transmitter. 

Federal court statistics show that over 90% of criminal defendants are convicted and sentenced, with acquittal rates as low as 0.4% in some years. 

The SDNY prosecution has a reputation for an even higher conviction rate. Keonne Rodriguez reportedly told reporters that he was aware of these statistics and of the reputation of Judge Denise Cote, who presided over his case, for harsh sentencing when he pleaded guilty to conspiracy to operate an unlicensed money transmitter business.

Many Bitcoin and crypto leaders who supported Trump’s 2024 reelection campaign are now questioning President Trump’s promised end to the “war on crypto.”

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