Lummis Blasts DOJ for Dumping Bitcoin Despite Trump’s ‘Digital Fort Knox’ Order

Concerns Rise as DOJ Bitcoin Sale Sparks Political Tension and Market Scrutiny

Growing concerns are emerging in Washington after a recent Bitcoin liquidation by a U.S. federal agency appeared to contradict a standing White House directive on digital asset management. The incident has triggered sharp criticism from lawmakers and raised fresh questions about whether U.S. crypto policy is truly unified—or still deeply fragmented.

At the center of the controversy is a small but symbolically significant Bitcoin sale carried out by the U.S. Marshals Service (USMS), an arm of the Department of Justice (DOJ). According to publicly available blockchain data and court-related disclosures, the agency sold approximately 57.55 Bitcoin, valued at roughly $6.3 million, in early November 2025. The funds were seized earlier from developers associated with Samourai Wallet, a privacy-focused Bitcoin service.

While the dollar amount itself is modest by market standards, the political and regulatory implications have proven far more substantial.

Senator Lummis Calls Out DOJ Over Bitcoin Sale

U.S. Senator Cynthia Lummis, a long-time advocate for Bitcoin and digital asset adoption, publicly criticized the DOJ’s actions, warning that the sale may have violated Executive Order 14233. That order, signed earlier under the Trump administration, instructed federal agencies to retain seized Bitcoin as part of a newly envisioned Strategic Bitcoin Reserve.

Source: Xpost

In a statement shared with hokanews, Lummis said the sale “undermines the entire concept of treating Bitcoin as a strategic national asset,” adding that the United States cannot afford inconsistent enforcement at a time when other nations are actively accumulating digital reserves.

Executive Order 14233 was designed to halt routine liquidation of seized Bitcoin and instead consolidate federal holdings into a long-term reserve, often described by officials as a “Digital Fort Knox.” The directive aimed to shift U.S. crypto policy away from automatic conversion into fiat currency and toward strategic asset preservation, similar to gold or petroleum reserves.

The Samourai Wallet Case and Asset Forfeiture

The Bitcoin in question was seized as part of a criminal investigation into Samourai Wallet developers, who faced allegations related to money laundering facilitation. Following legal proceedings, the assets were forfeited under U.S. law, placing them under federal custody.

Legal experts note that forfeiture under 18 U.S. Code § 982 does not automatically require immediate liquidation. Instead, agencies typically have discretion over how seized assets are managed unless otherwise directed by statute or executive order.

Critics argue that once Executive Order 14233 came into effect, those seized coins should have been classified as “Government BTC” and excluded from routine sales. The fact that the USMS allegedly used Coinbase Prime to execute the transaction has fueled speculation that internal DOJ protocols may not have been updated to reflect the White House’s revised stance.

Internal Friction Within Federal Agencies

The episode has exposed apparent friction between the executive branch and parts of the DOJ, particularly the Southern District of New York (SDNY), which has historically taken an aggressive approach to crypto enforcement.

Several policy analysts told hokanews that the incident reflects a broader institutional lag, where enforcement agencies continue operating under older frameworks despite shifts in political leadership and regulatory philosophy.

This concern is amplified by a recent DOJ memo issued by Deputy Attorney General Todd Blanche, titled “Ending Regulation by Prosecution,” which called for a more restrained, policy-driven approach to digital asset oversight.

To critics, the Bitcoin sale suggests that some agencies may still be acting independently of the administration’s stated crypto strategy.

Market Reaction Remains Surprisingly Calm

Despite the political uproar, the crypto market’s response has been muted. As of January 6, 2026, the total cryptocurrency market capitalization stands at approximately $3.26 trillion, reflecting a 1.76% increase over the previous 24 hours.

Source: CoinMarketCap Bitcoin Chart

Bitcoin itself is trading near $93,300, up about 0.85% on the day, according to data compiled by hokanews. Analysts note that a $6.3 million sale is negligible compared to Bitcoin’s daily trading volume, which often exceeds tens of billions of dollars.

However, market observers warn that the real issue is not price impact but policy signaling. Inconsistent actions by federal agencies could introduce uncertainty about how future seized crypto assets will be handled.

Strategic Bitcoin Reserve: Vision vs. Execution

The concept of a U.S. Strategic Bitcoin Reserve has gained traction over the past year, particularly as governments worldwide explore alternatives to traditional reserve assets. Proponents argue that Bitcoin’s scarcity, neutrality, and global liquidity make it a compelling long-term hedge.

Senator Lummis and other supporters have compared Bitcoin accumulation to historical gold purchases, emphasizing that early adoption could offer geopolitical and economic advantages.

Yet the recent DOJ sale highlights the challenges of implementing such a strategy across a sprawling federal bureaucracy. Without clear enforcement mechanisms or centralized oversight, agencies may continue defaulting to legacy asset disposal practices.

International Context and Global Competition

The debate comes amid growing global interest in sovereign Bitcoin holdings. Several countries, including El Salvador and Bhutan, have openly acknowledged accumulating Bitcoin as part of national strategies. Other governments are believed to hold large amounts through seizures or state-backed mining initiatives.

In this context, critics argue that the U.S. risks falling behind if internal disagreements prevent it from executing a coherent digital asset policy.

“Strategic reserves only work if everyone follows the same rulebook,” one policy analyst told hokanews. “Mixed messages weaken credibility.”

Legal Questions Still Unresolved

From a legal standpoint, the question of whether the DOJ violated Executive Order 14233 remains unresolved. Executive orders typically apply across federal agencies, but enforcement often depends on internal compliance and oversight.

There has been no official confirmation that disciplinary action is being considered. However, sources close to Capitol Hill suggest that lawmakers may push for hearings or formal clarification on how seized digital assets should be handled going forward.

Will the White House Step In?

As Senator Lummis continues to criticize DOJ Bitcoin sale practices, attention is shifting back to the White House. Some observers speculate that the administration could issue further guidance, revise the executive order, or centralize control of federal crypto assets under a single authority.

Others believe the controversy may accelerate legislative efforts to codify Bitcoin reserve policy into law, removing ambiguity altogether.

For now, the crypto industry is watching closely. With market capitalization holding steady and long-term sentiment largely intact, the immediate financial impact appears limited. But the policy implications could shape how the United States approaches digital assets for years to come.

Conclusion

The DOJ’s Bitcoin sale may have involved a relatively small amount of capital, but its symbolic weight is significant. It has reignited debate over federal crypto governance, exposed gaps between policy and practice, and raised doubts about whether the United States can present a unified front on digital asset strategy.

As the industry waits for clarity, one thing is clear: if Washington truly intends to build a “Digital Fort Knox,” internal coordination will be just as important as market conviction.

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