Senator Cynthia Lummis (R-WY) accused the Department of Justice of potentially defying presidential authority by liquidating Bitcoin seized in a high-profile criminal case. The Senator alleges that the Southern District of New York (SDNY) offloaded assets forfeited by the developers of Samourai Wallet on Monday.
Lummis claims the transaction appears to violate Executive Order 14233. That order, signed in March 2025, mandates the preservation of forfeited digital funds for the U.S. Strategic Bitcoin Reserve.
Lummis voiced her objections on the social media platform X late Monday. She cited a report from Frank Corva of Bitcoin Magazine that showed a zero balance in a federal seizure wallet.
“Why’s the U.S. gov still liquidating bitcoin when the President explicitly directed these assets be preserved for our Strategic Bitcoin Reserve?” Lummis wrote. “We can’t afford to squander these strategic assets while other nations are accumulating bitcoin. I’m deeply concerned about this report.”
The Samourai Transaction Trace
The controversy stems from a plea deal involving Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill. The defendants transferred 57.55 BTC to a Coinbase Prime address on November 3, 2025, as part of their settlement.
At the time of transfer, the assets carried a value of roughly $6.3 million. Based on current prices near $93,000, those same coins are now worth approximately $5.35 million.
On-chain data verified on January 6 shows the Coinbase Prime address currently holds a zero balance. Proponents of the Strategic Reserve interpret this as a liquidation. However, the Department of Justice hasn’t confirmed a sale.
The move could represent a shift in custody or an internal transfer to a broader Treasury-managed wallet. Some legal analysts note that Executive Order 14233 includes specific exceptions for law enforcement expenses, which might allow for the sale of seized assets to cover the costs of complex technical investigations.
SDNY and the ‘Sovereign District’ Friction
The potential liquidation exposes a rift between the administration’s “Bitcoin-first” policy and the autonomous culture of the SDNY. The Manhattan-based district has a history of independent action.
Chain Street’s Take
The Samourai transaction reveals a turf war between the White House and the “Sovereign District” in Manhattan. Lummis is right to be loud. If the SDNY sold those coins, they didn’t just dump 57 BTC; they dumped the President’s policy.
This isn’t a compliance error but a signal that career prosecutors’re not ready to trade their auction gavels for HODL instructions. The Strategic Reserve’s only as strong as its weakest link. Right now, that link’s a DOJ bureaucracy that still prefers a dollar in the hand over a bitcoin in the vault.
