A clash is emerging in Washington over how the United States should handle Bitcoin it seizes through criminal cases, after a reported government sale triggered backlash from lawmakers pushing for a national BTC reserve.
Cynthia Lummis, a long-time Bitcoin advocate, criticized federal authorities for selling confiscated BTC rather than holding it as part of a proposed Strategic Bitcoin Reserve. Lummis is a co-sponsor of the BITCOIN Act, which seeks to formally integrate Bitcoin into U.S. reserve policy.
Key Takeaways
- A U.S. government sale of seized Bitcoin has triggered backlash from Senator Cynthia Lummis and other Bitcoin advocates.
- The liquidation appears to conflict with an executive order directing seized BTC to be added to a Strategic Bitcoin Reserve.
- The incident has raised concerns about coordination between the White House and federal agencies handling forfeited crypto.
Sale sparks questions about execution of policy
The controversy centers on a reported liquidation carried out by the U.S. Marshals Service, acting under instructions from the Department of Justice. Roughly 57.5 BTC, valued at about $6.3 million at the time, was sold after being forfeited by the founders of Samourai Wallet as part of a plea agreement.
What makes the sale contentious is its timing. Earlier this year, Donald Trump signed Executive Order 14233, directing that Bitcoin obtained through criminal or civil forfeiture should be retained and added to the United States’ Strategic Bitcoin Reserve, rather than immediately liquidated.
Lummis: Bitcoin is a strategic asset, not cash flow
Lummis argued that selling seized Bitcoin runs counter to the administration’s stated goal of treating BTC as a long-term strategic resource. She warned that disposing of Bitcoin now could weaken the U.S. position as other countries choose to hold onto confiscated crypto instead of selling it.
In her view, each liquidation reduces the credibility of the reserve concept and raises doubts about whether agencies are aligned on policy. She also suggested the sale may not be an isolated case, calling for clarity on whether similar transactions have occurred elsewhere.
Oversight gaps come into focus
The episode has exposed potential coordination issues between the White House and federal enforcement agencies. While the executive order sets a clear policy direction, its implementation depends on agencies that have historically sold seized crypto as a matter of routine.
That disconnect is now under review. Patrick Witt, executive director of the President’s Council of Advisors for Digital Assets, confirmed that the administration is examining whether the sale complied with the executive order.
A defining moment for the Bitcoin reserve idea
The dispute may become a turning point for how the U.S. handles digital assets going forward. If the sale is found to conflict with executive guidance, lawmakers could push for tighter rules governing seized Bitcoin, potentially limiting the discretion of agencies like the DOJ and U.S. Marshals Service.
More broadly, the situation highlights a fundamental policy shift underway in Washington. Bitcoin is no longer viewed solely as an asset to be converted into dollars after seizures, but increasingly as a strategic holding tied to national economic and geopolitical considerations. Whether that shift is fully embraced across government institutions now appears to be the real test.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
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Source: https://coindoo.com/senator-lummis-questions-us-bitcoin-sale-despite-strategic-reserve-order/
