A Pause on Government Bitcoin Sales
In a notable move that diverges from past practices, the U.S. Department of Justice (DOJ) has not sold any of the Bitcoin it forfeited in connection with the high-profile case against Samourai Wallet. This decision, confirmed by a White House advisor, stems from a specific directive issued during the previous administration.
The Legal Halt: Executive Order 14233
The key to understanding this pause lies in Executive Order 14233, signed by former President Donald Trump. This order explicitly mandates that any Bitcoin obtained by the U.S. government through criminal or civil forfeiture proceedings “shall not be sold.” The order effectively places a freeze on the government’s ability to liquidate seized cryptocurrency assets on the open market, a practice that had become relatively common in earlier cases.
The Samourai Wallet case, which involved allegations of operating an unlicensed money-transmitting business and facilitating money laundering, resulted in the seizure of a significant amount of Bitcoin. Under normal circumstances following a forfeiture, the government might auction these assets. However, the standing executive order created a legal barrier, preventing the DOJ from taking that step.
Implications for Crypto Regulation and Markets
This situation highlights the evolving and sometimes unpredictable nature of cryptocurrency regulation. An executive order from a past administration continues to directly influence how current law enforcement handles digital asset seizures. It raises practical questions about the long-term custody and management of these forfeited funds by the government.
For the cryptocurrency market, the decision means that a large, potential sell-pressure event was avoided. Government sales of seized Bitcoin can sometimes influence market prices, as they introduce large, concentrated sell orders. By holding the assets, the DOJ has temporarily removed that variable from the market equation.
The case also underscores the increasing scrutiny on cryptocurrency mixers and privacy-focused wallets like Samourai. Regulators and law enforcement are actively targeting services they believe can obscure the trail of illicit funds, leading to more seizures. The policy on how to handle those seized assets remains a point of legal and administrative discussion.
As the Biden administration reviews and potentially updates cryptocurrency policies, the fate of Executive Order 14233 and the protocol for managing forfeited digital assets will be key areas to watch. For now, the Bitcoin from the Samourai case sits in a government wallet, its future sale on hold due to an order from a different political era.
