The US Marshals Service (USSMS) seems to have offered $6.3 million value of Bitcoin that Samurai Pockets builders Keon Rodriguez and William Lonergan Hill paid to the US Division of Justice (DOJ) as a part of their responsible pleas.
Doing so may violate Govt Order (EO) 14233, which requires Bitcoin acquired by way of felony or civil asset forfeiture proceedings to be held as a part of the U.S. Strategic Bitcoin Reserve (SBR).
If the Southern District of New York (SDNY), the place the Samurai case was scheduled to be heard, was in actual fact in violation of EO 14233, this may not be the primary time SDNY officers acted opposite to federal directions.
What occurred to Bitcoin?
Bitcoins confiscated by Rodriguez and Hill might be offered or have already been offered, in accordance with a beforehand undisclosed doc titled “Asset Liquidation Settlement” obtained completely by Bitcoin Journal.
In response to the paperwork, the defendants agreed to switch $6,367,139.69 value of Bitcoin to the USMS (57.55353033 Bitcoins on the time the contract was signed by the ultimate celebration on November 3, 2025). This was Assistant U.S. Legal professional Cecilia Forgeron.
The Bitcoin despatched from deal with bc1q4pntkz06z7xxvdcers09cyjqz5gf8ut4pua22r on November 3, 2025 seems to have bypassed direct management by USSMS. As a substitute, it was despatched on to Coinbase Prime deal with 3Lz5ULL7nG7vv6nwc8kNnbjDmSnawKS3n8 (which Arkham Intel believes is from a brokerage agency), and certain offered.
This Coinbase Prime deal with at the moment has a zero stability, indicating that the Bitcoin might have already been offered.
Violation of Govt Order 14233
If the USMS sells the confiscated Bitcoin, it will seemingly violate EO 14233, which mandates that Bitcoin acquired by the US authorities by way of felony forfeiture (referred to within the EO as “Authorities BTC”) “shall not be offered” and must be contributed to the US SBR.
If the USMS sells Bitcoin, they achieve this at their very own discretion, not as a authorized mandate. This means that some members of the Justice Division should view Bitcoin as a taboo asset that must be offered, moderately than the strategic asset that President Trump has directed the company to carry.
On condition that Samurai’s prosecution started below a earlier administration that was notoriously hostile to non-custodial cryptographic instruments and their builders, the choice to disregard EO 14233 and promote Bitcoin regardless of orders from the chief department suits right into a sample of treating Bitcoin as one thing that must be faraway from authorities stability sheets as quickly as attainable.
Authorized particulars about forfeiture and liquidation
In response to authorized sources near the matter, the Samourai builders have confiscated the Bitcoin below 18 U.S.C. §982(a)(1). The regulation supplies that any crime that violates 18 United States Code § 1960, the regulation that prohibits the operation of unlicensed cash switch companies, will end result within the particular person committing the crime to the US forfeiture of the property concerned within the crime.
§ 982 and its integrated 21 USC § 853(c), which supplies that “any property thereafter transferred to an individual aside from the defendant shall be topic to a particular forfeiture judgment and thereafter ordered for forfeiture to the US,” the Bitcoins forfeited by Rodriguez and Hill match the definition of an EO. “Authorities BTC”.
Neither part 982 nor integrated part 853 requires liquidation of property confiscated as a part of a felony offense. Moreover, the forfeiture legal guidelines cited in Part 3 of the EO—31 USC § 9705 and 28 USC § 524(c)—regulate the place forfeiture proceeds could be deposited and the way they can be utilized. It doesn’t require confiscated Bitcoins to be exchanged for money moderately than held in bodily kind.
The EO additionally supplies that “authorities BTC” falls below the umbrella of “authorities digital property,” and states that besides in sure situations, “the top of every authorities company shall not promote or in any other case get rid of any authorities digital property.” Neither of those applies to Rodriguez or Hill, and in every case the U.S. Legal professional Basic will play a task in deciding what to do with confiscated digital property.
Sovereign District of New York
Contemplating EO 14233 and the statutes cited on this article, it seems that SDNY acted in violation of its EO 14233 obligation to remit Bitcoin acquired by way of felony forfeiture to the US SBR.
This isn’t the primary time the SDNY has taken such motion.
The jurisdiction, generally referred to colloquially because the “Sovereign District of New York,” has a popularity for working independently and unilaterally, regardless of being a part of the federal system.
Additional proof of that is the truth that the SDNY has moved ahead with its case in opposition to Rodriguez and Hill, in addition to its case in opposition to Twister Money developer Roman Storm.
On April 7, 2025, Deputy Legal professional Basic Todd Blanche issued a memo titled “Ending Prosecutorial Regulation,” wherein he acknowledged that “[the Department]is not going to topic digital forex exchanges, mixing and tumbling providers, and offline wallets to end-user conduct…”
Nonetheless, the SDNY appeared to disregard the memo’s language when shifting ahead with the Samurai Pockets and Twister Money instances.
And when Hill and Rodriguez’s attorneys realized that brady Two senior officers from the U.S. Treasury Division’s Monetary Crimes Enforcement Community (FinCEN) requested for a “sturdy indication” that Samurai Pockets was not functioning as a cash switch car because of the non-custodial nature of the service, however the prosecution proceeded anyway.
In felony instances tried inside the federal courtroom system, over 90% of defendants are convicted and sentenced, and in some years solely 0.4% are acquitted. And prosecutors in SDNY instances have a popularity for having even greater success charges.
Rodriguez knew these statistics and the truth that Choose Dennis Cote, who presided over his and Hill’s case, had a popularity for harsh sentencing.
He advised me as a lot the morning earlier than pleading responsible to conspiracy to function an unauthorized cash switch enterprise.
Is the digital forex battle actually over?
Many Bitcoin and crypto supporters who voted for President Trump in 2024, in addition to the crypto trade that supported him in his re-election, at the moment are starting to query whether or not President Trump actually desires the crypto wars to finish.
To attain this, the Division of Justice below President Trump should honor the mandate of EO 14233 and observe Deputy Legal professional Basic Blanche’s steerage to stop prosecuting non-custodial cryptography builders.
On the latter level, President Trump just lately stated he was contemplating pardoning Rodriguez.
The president’s resolution to pardon Rodriguez and on the similar time have the Justice Division examine why Samurai Builders offered confiscated bitcoins will ship a sign that the president is critical about his assist for bitcoin and cryptocurrencies.
The put up Did Justice Division Prosecutors Violate Trump Govt Order by Promoting Bitcoins from Confiscated Samurai Wallets? was first printed in Bitcoin Journal and written by Shinobi.
