#JusticeDepartmentSellsBitcoin

The recent sale of Bitcoin by the U.S. Department of Justice (DOJ) via Coinbase Prime has become a focal point of intense debate, as it directly intersects with the shifting U.S. policy toward a Strategic Bitcoin Reserve (SBR).

While these sales are often framed as routine liquidations of assets seized from criminal activity (such as the Silk Road or Samourai Wallet cases), they now carry significant political and symbolic weight.

A Shift in Policy Under the current administration, an Executive Order (EO 14233) was signed in early 2025 to establish a Strategic Bitcoin Reserve. This order specifically mandates that "Government BTC" acquired via forfeiture should generally be held, not sold, to build a national stockpile.

Recent reports (as of late 2025/early 2026) suggest the DOJ liquidated approximately $6.3 million in BTC from the Samourai Wallet case.

Critics argue these sales violate the Executive Order, while others suggest the DOJ is exercising independent prosecutorial discretion or clearing out "pre-reserve" case files.

While $6.3 million is a "drop in the bucket" for the $3 trillion+ crypto market, larger transfers—like the $1.9 billion move of Silk Road coins in late 2024—have historically caused more significant "supply overhang" anxiety.

Do Government Sales Matter for Long-Term Confidence?

The impact of government sales is less about the immediate price action and more about the narrative of legitimacy.

Sales are irrelevant because the market is now deep enough to absorb them. Institutional demand via Spot ETFs (holding over $100B in AUM) provides a permanent floor that far exceeds government-seized supply.

Persistent sales signal that the government still views Bitcoin as a "taboo asset" or a tool for crime rather than a strategic reserve, which could delay broader sovereign adoption.

Case If the U.S. stops selling and begins accumulating (as proposed by the BITCOIN Act), it signals Bitcoin has reached "Digital Gold" status. Each sale is seen by SBR advocates as a "missed opportunity" for the national balance sheet.

Markets stayed calm because the liquidity available through Coinbase Prime and institutional OTC desks allows these sales to happen with minimal "slippage" (price impact). However, the political fallout is increasing. Proponents of a reserve argue that the U.S. is "selling the future" to fund current budgets, while skeptics believe the government should not be in the business of speculating on volatile assets.

The legislative landscape in early 2026 is a tug-of-war between new Executive mandates to "HODL" and the traditional liquidation practices of law enforcement agencies like the DOJ.

Here is the current state of the U.S. Strategic Bitcoin Reserve (SBR) and how it compares to the rest of the world.

1. U.S. Legislative Progress (2025–2026) While President Trump signed Executive Order 14233 in March 2025 to establish a reserve, formal legislation to make it permanent and expand it is still moving through Congress.

The BITCOIN Act of 2025 (S. 954 / H.R. 2032): Sponsored by Senator Cynthia Lummis, this bill seeks to mandate a purchase of 1 million BTC over five years. As of January 2026, it remains in the Senate Banking Committee.

The GENIUS Act: Unlike the SBR, this stablecoin-focused bill was signed into law in July 2025. It provides the regulatory "plumbing" for banks to handle digital assets, which many see as a prerequisite for a functional national reserve.

State-Level Reserves: While the federal bill stalls, states are moving faster. Texas, Arizona, and New Hampshire have already passed laws allowing state-managed crypto reserves, with Texas leading via its $10 million initial investment in Bitcoin and BTC ETFs.

2. The DOJ "Defiance" Controversy

The recent $6.3 million sale of Bitcoin (linked to the Samourai Wallet case) has sparked a legal debate.

ConflictExecutive Order 14233 explicitly prohibits the sale of "Government BTC" intended for the reserve.

The DOJ's ActionThe DOJ (specifically the Southern District of New York) liquidated the assets despite the order.

The JustificationLegal experts suggest the DOJ may be utilizing a "victim restitution" loophole or asserting that the assets were forfeited before the Reserve was fully operationalized under Treasury control.

3. Global Comparison: How Other Countries Manage Seized Crypto

The U.S. is currently the only major power attempting a "Never Sell" policy. Other nations vary wildly:

Germany (The Liquidation Model): Germany remains pragmatic. In mid-2024, they famously sold nearly 50,000 BTC (worth ~$2.8B at the time) within weeks, prioritizing immediate budget liquidity over long-term price appreciation.

United Kingdom (The Legalist Model): Under the Proceeds of Crime Act (POCA), the UK has streamlined the ability for police to seize and sell crypto even before an arrest is made. They generally treat Bitcoin like any other confiscated asset—selling it for GBP to fund law enforcement.

El Salvador (The Sovereign Accumulator): The polar opposite of the UK/Germany. El Salvador treats Bitcoin as Legal Tender and has a policy of buying 1 BTC per day, regardless of price, to build national wealth.

Bhutan (The Mining Model): A unique outlier, Bhutan does not rely on seizures. They use their vast hydroelectric resources to mine Bitcoin, quietly amassing a stockpile worth nearly $800 million as of late 2025.

A Fragmented Future

The U.S. is currently in a "hybrid" phase: the Executive branch wants to hoard, the Legislative branch is debating, and the Judicial/Enforcement branch is still selling. This inconsistency is likely to continue until the BITCOIN Act is either passed or defeated in late 2026.