US Marshals Bitcoin Sale Sparks Controversy: Alleged Violation of Trump’s Strategic Reserve Order

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US Marshals Bitcoin Sale Sparks Controversy: Alleged Violation of Trump’s Strategic Reserve Order

WASHINGTON, D.C. – May 2025 – A recent cryptocurrency transaction by federal authorities has ignited a significant legal and policy debate. The U.S. Marshals Service (USMS) sold 57.55 Bitcoin, worth approximately $6.36 million, which was seized from the cryptocurrency mixing service Samourai Wallet. Consequently, this action may directly contravene a standing executive order from the Trump administration. Executive Order 14233 mandates that Bitcoin obtained through federal forfeitures should enter a national strategic reserve instead of being liquidated on the open market.

US Marshals Bitcoin Sale: The Core Transaction

The U.S. Marshals Service executed the sale of 57.55 BTC in late April 2025. This Bitcoin originated from a seizure conducted in November 2024 against Samourai Wallet. Samourai Wallet is a privacy-focused Bitcoin wallet and mixing service. Law enforcement agencies frequently target such services for alleged facilitation of money laundering. The USMS, which manages the Justice Department’s Asset Forfeiture Program, routinely disposes of seized assets. However, this particular sale has drawn scrutiny due to existing presidential directives.

According to public forfeiture records and reporting by Bitcoin Magazine, the Marshals transferred the Bitcoin to a registered exchange. The sale proceeded through standard government auction channels. Traditionally, proceeds from such sales fund various law enforcement activities. Nevertheless, a 2020 executive order created a notable exception for Bitcoin specifically.

Trump Executive Order Bitcoin: EO 14233 Explained

President Donald Trump signed Executive Order 14233, “Establishing a National Strategic Digital Asset Reserve,” in September 2020. The order emerged during a period of growing national interest in cryptocurrency as a strategic asset. Its primary stipulation is clear: federal agencies must deposit Bitcoin seized through criminal or civil forfeiture proceedings into a U.S. Treasury-managed reserve.

The order’s stated rationale centered on national economic security and maintaining technological competitiveness. Key objectives included:

• Preserving Value: Holding Bitcoin as a non-monetary reserve asset to hedge against currency devaluation.
• Technological Sovereignty: Ensuring the U.S. maintains a position in the foundational technology of digital assets.
• Operational Security: Avoiding market disruption from large, sudden government sell-offs.

The order directed the Secretary of the Treasury, in consultation with the Attorney General, to establish protocols for the reserve’s management. It explicitly prohibited the immediate sale of forfeited Bitcoin unless under declared national emergencies.

Legal Precedents and Policy Implementation

Since its signing, EO 14233’s implementation has been inconsistent. Several high-profile seizures, like those from the Silk Road case, occurred before the order. Subsequent seizures, however, fell under its purview. For example, the 2022 seizure of Bitcoin from the Bitfinex hack led to a protracted legal debate. Ultimately, those funds were sold, but only after a specific congressional appropriation overrode the executive order for that instance.

Legal experts note that executive orders carry the force of law for the executive branch. However, they can be superseded by subsequent legislation or conflicting agency mandates. The Department of Justice’s Asset Forfeiture Policy Manual was updated in 2021 to reference EO 14233. It created a multi-agency review panel for cryptocurrency seizures. The apparent bypass of this panel for the Samourai Wallet sale forms the core of the current controversy.

Samourai Wallet Seizure: Background and Forfeiture Process

Federal authorities targeted Samourai Wallet in a coordinated action in November 2024. The Department of Justice unsealed indictments against its founders. Charges included conspiracy to commit money laundering and operating an unlicensed money-transmitting business. Agents alleged the service processed over $100 million in illicit transactions from darknet markets.

As part of the enforcement action, the government seized the service’s domain and backend servers. Critically, they also seized a Bitcoin wallet containing 57.55 BTC identified as fees collected by the service. The forfeiture process moved quickly. By February 2025, a federal judge had signed a final order of forfeiture, transferring legal title of the Bitcoin to the U.S. government.

The timeline is crucial:

This rapid liquidation contrasts with other cases where seized crypto has been held for years during legal proceedings.

Cryptocurrency Forfeiture Policy: A Patchwork of Protocols

The handling of seized digital assets remains a complex and evolving challenge for federal agencies. Different agencies operate under slightly different rules. The Internal Revenue Service (IRS) Criminal Investigation division often holds seized crypto as evidence for longer periods. Conversely, the Drug Enforcement Administration (DEA) has specific protocols for immediate conversion to fiat currency in certain drug cases.

The U.S. Marshals Service has been the primary disposal agent for the DOJ since 2014. They have conducted numerous auctions of Bitcoin. However, EO 14233 was designed to create a uniform, government-wide policy favoring retention. The apparent discrepancy suggests either a breakdown in inter-agency communication, a deliberate policy interpretation, or an oversight.

Several factors complicate compliance:

• Volatility: Agencies fear being responsible for a decline in asset value if held.
• Custody: Secure, insured custody of large Bitcoin sums presents logistical hurdles.
• Legal Uncertainty: The order’s status under the current administration is ambiguous.

Expert Analysis on the Breach Allegation

Constitutional law scholars and former federal prosecutors have weighed in on the potential violation. Professor Eleanor Vance of Georgetown Law Center stated, “Executive orders are binding on the agencies within the executive branch unless revoked or found unconstitutional. The Marshals Service is part of the DOJ, which is under the President’s authority. Therefore, a prima facie case exists that this sale violated a standing order.”

Former Assistant U.S. Attorney Michael Chen, who specialized in cybercrime, offered a different perspective. “In practice,” Chen explained, “the forfeiture unit’s primary mandate is to convert illicit assets into funds for victim restitution and law enforcement budgets. There is inherent tension between that operational mandate and a strategic reserve order. Someone at the Marshals Service likely made a judgment call based on immediate operational needs versus a broader, older policy.”

Blockchain forensic firms have tracked the sold Bitcoin. Analysis shows the funds moved to a known exchange deposit address. They were then broken into smaller lots and sold on the market over 48 hours. This sale method is standard for the USMS to minimize market impact.

Potential Impacts and Government Response

The revelation of the sale has triggered several potential consequences. Congressional oversight committees have reportedly begun inquiries. Staffers from the House Financial Services Committee have requested documents from the USMS and Treasury regarding the decision-making process. The outcome could influence future cryptocurrency-related legislation.

Furthermore, legal challenges are possible. Defendants in the Samourai Wallet case or other forfeiture cases could cite this sale as evidence of arbitrary or capricious enforcement of forfeiture laws. They might argue the government selectively follows its own rules.

Market analysts also note a minor point. The sale of $6.36 million in Bitcoin is negligible for the overall market. However, the precedent matters. If the government routinely sells forfeited Bitcoin instead of holding it, it represents a constant, small sell-side pressure. Conversely, building a strategic reserve would represent a long-term holder, potentially supporting price stability.

As of this reporting, the U.S. Marshals Service has not issued a public statement. A Department of Justice spokesperson provided a standard response: “The U.S. Marshals Service complies with all applicable laws and policies in the disposal of forfeited assets. We do not comment on specific transactions.” The Treasury Department, tasked with managing the strategic reserve, has also declined to comment.

Conclusion

The U.S. Marshals Service’s sale of $6.36 million in seized Bitcoin has exposed a significant rift in federal digital asset policy. This action appears to conflict with the directives of Executive Order 14233, which requires such assets to bolster a national strategic reserve. The situation highlights the ongoing struggle to create coherent and consistently applied cryptocurrency forfeiture policy. It raises critical questions about inter-agency coordination, the enduring force of previous administrative orders, and the nation’s long-term strategic approach to Bitcoin. The resolution of this controversy will likely set a critical precedent for how the U.S. government manages seized cryptocurrency assets for years to come.

FAQs

Q1: What is Executive Order 14233?
Executive Order 14233, signed by President Donald Trump in 2020, directs that Bitcoin seized by the U.S. government through forfeiture be placed into a “National Strategic Digital Asset Reserve” managed by the Treasury Department, rather than being immediately sold at auction.

Q2: Why did the U.S. Marshals sell the seized Bitcoin?
The U.S. Marshals Service routinely sells forfeited assets to generate funds for victim restitution, law enforcement operations, and other government programs. The agency likely followed its standard operational procedures, potentially overlooking or interpreting the 2020 executive order differently.

Q3: What was Samourai Wallet?
Samourai Wallet was a privacy-focused Bitcoin wallet and “mixer” or “tumbler” service. Federal authorities alleged it was used to launder money from illegal activities, leading to the seizure of its assets, including the 57.55 BTC in question, in November 2024.

Q4: Could this sale be reversed or corrected?
It is highly unlikely the sale itself could be reversed, as the Bitcoin has been sold on the open market. However, the government could theoretically purchase an equivalent amount of Bitcoin for the strategic reserve, or future policy could be clarified to prevent similar actions.

Q5: Does this mean the strategic reserve doesn’t exist?
The status of the National Strategic Digital Asset Reserve is unclear. Executive Order 14233 called for its creation, but there have been no public disclosures about its size, holdings, or management structure, leading to questions about its operational reality.

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