U.S. Strategic Bitcoin Reserve Takes Shape as DOJ Confirms Samourai Assets Won’t Be Liquidated

The U.S. Strategic Bitcoin Reserve is moving from theory to practice following new confirmation from the Department of Justice. Federal officials confirmed that Bitcoin forfeited in the Samourai Wallet case has not been sold.

The assets will also not be liquidated in the future. Instead, they will remain on the U.S. government balance sheet as part of the Strategic Bitcoin Reserve.

Bitcoin Sell-Off Fears Ease After DOJ Confirmation

The update came from Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets. Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets stated the DOJ verified the current status under Executive Order 14233.

Executive Order 14233 directs all forfeited Bitcoin to be retained, and not sold, by the U.S. Federal Government. This is consistent with overall expectations around reserve policies, which include a previous strategic Bitcoin reserve outlook, from ARK Invest CEO Cathie Wood.

As reported through multiple media releases, it has been claimed that the seized Bitcoin has already been liquidated. The plea of guilt by the Samourai Wallet developers to the charges brought against them by prosecutors created the concerns.

However, the U.S. Department of Justice has stated that those concerns are not true. The forfeited Bitcoin associated with the Samourai Wallet will remain an asset of the U.S. Government and may be used as a strategic asset.

This is a significant break from the years of standard practice of selling forfeited cryptocurrency immediately following a seizure.

Can U.S. Bitcoin Reserve Reduce Its Volatility in the Markets?

In the past, forfeited Bitcoin was sold through auctions or sold in the open markets, adding unanticipated supply to the markets, including times when market conditions are most sensitive. There have been concerns raised by lawmakers regarding oversight.

Recently, Senator Lummis expressed concerns about the DoJ selling forfeited Bitcoin. In deciding to keep the Bitcoin, the U.S. is signaling a paradigm shift in how the U.S. views digital assets.

No longer will Bitcoin be seen as nothing more than an item to be confiscated. But instead, it will be recognized as a long-term strategic resource, similar to other commodities and sovereign reserves.

This perspective of Bitcoin aligns with the way that many other digital assets are being viewed rather than an asset whose primary purpose is to be sold.

The confirmation of the U.S. Department of Justice also helps to alleviate concerns of investors related to government-led sell pressure. Investors have long monitored government-related Bitcoin wallets for evidence of sell orders and/or actual sales.

The sell-off actions from the U.S. government may create significant market volatility and downward price movement of cryptocurrencies, including Bitcoin. Holding first, rather than immediately liquidating the seized Bitcoins may help mitigate these types of negative pressures on the market.

Is The U.S. Setting The Global Benchmark For Bitcoin?

This event supports the previous evidence of the commitment of all federal agencies to implement the Strategic Bitcoin Reserve framework. This event also supports that law enforcement agencies are working together with the executive branch to coordinate their enforcement efforts.

Coordination between prosecutors and policymakers has historically not been uniform. However, this represents a positive step forward.

The implications of this decision may extend beyond U.S. borders and influence the way other countries treat and manage seized digital assets. Countries often view U.S.-led policies as a model for their own policy-making. Hence, international influence is already apparent as Taiwan plans a Bitcoin reserve using seizures and use the seized assets to starts its strategy.

An alternative to liquidating assets could become a normal method of handling seized digital assets globally. Thus, they provide support for state-wide adoption of Bitcoin as a legitimate strategic asset class.