Reports are circulating on social media that the U.S. Department of Justice (DOJ) may have sold a large amount of Bitcoin seized from a digital wallet company. The news has raised eyebrows and sparked concern among cryptocurrency enthusiasts and government-watchers alike.
Bitcoin Transfer Sparks Questions
According to recent reports, the DOJ transferred 57.553 Bitcoin to Coinbase Prime custody on November 3, 2025. These Bitcoin were originally seized from Keonne Rodriguez and William Lonergan Hill, co-founders of Samourai Wallet, after they pleaded guilty to running an unlicensed money-transmitting business. The total value of the Bitcoin at the time was estimated to be over $6.3 million.
Blockchain data shows that after the transfer to Coinbase Prime, the Bitcoin moved internally to a different deposit address. Experts explain that this type of movement is normal for custodial services like Coinbase. Such transfers are part of routine internal accounting and storage procedures. While the original deposit address now shows a zero balance, this does not automatically mean the Bitcoin was sold. It simply indicates that the coins were consolidated within Coinbase’s system.
It is important to note that all activity observed on the blockchain is consistent with standard custodial behavior. There is currently no evidence that the Bitcoin was sent to other wallets or broken into smaller amounts for trading. This suggests that the Bitcoin may still be held within Coinbase Prime, rather than being sold on the market.
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Legal Rules and Executive Orders
The situation is further complicated by Executive Order 14233, which requires that all Bitcoin acquired through federal asset forfeiture be retained as part of the U.S. Strategic Bitcoin Reserve. The order specifically prohibits agencies from selling these Bitcoin unless certain strict conditions are met.
In this case, it is unclear whether the Bitcoin was ever formally added to the Strategic Reserve. Without clear documentation, questions remain about whether moving the Bitcoin to Coinbase Prime complied with federal rules. Legal experts say that the executive order treats forfeited Bitcoin as “Government BTC” that must be kept unless the Attorney General provides special approval for sale.
An Asset Liquidation Agreement, signed by Assistant U.S. Attorney Cecilia Vogel on November 3, 2025, confirms that Rodriguez and Hill agreed to forfeit exactly 57.553 BTC. However, the Bitcoin was sent directly to Coinbase Prime, bypassing typical U.S. Marshals Service custody. This has fueled speculation that the DOJ could have sold the Bitcoin off-chain. If a sale occurred within Coinbase’s private system, there would be no blockchain record to confirm it. Only official documentation from the DOJ or Coinbase could provide proof.
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Public Concern and Oversight Questions
The handling of this Bitcoin seizure has also drawn attention because of the Southern District of New York’s (SDNY) role in the case. This district has a history of taking independent actions in cryptocurrency prosecutions, sometimes moving forward even when DOJ leadership issued new guidance. In this case, prosecutors continued despite a memo from Deputy Attorney General Todd Blanche signaling a reduced focus on privacy-focused wallets.
Social media users and public figures have expressed concern about the possible sale of government Bitcoin. Senator Cynthia Lummis publicly questioned why the government might liquidate Bitcoin when the executive order specifically mandates its retention for the Strategic Bitcoin Reserve. Many worry that offloading these assets could undermine strategic holdings and reduce transparency. Reports emphasize that the blockchain alone does not confirm a sale. The movements seen are consistent with standard internal operations within Coinbase Prime, leaving the public with unanswered questions.
Until additional documentation or confirmation is released, it is impossible to determine whether the 57.553 BTC was sold or remains in custody. Blockchain data confirms movement into Coinbase Prime, but off-chain actions are still opaque. The case highlights the challenges of tracking cryptocurrency when transfers happen inside private custodial platforms.