US DOJ Bitcoin Sales Spark Concern From US Senator - Is the Government Dumping Your Digital Gold?

When the Department of Justice starts moving Bitcoin, the market holds its breath. A US Senator just sounded the alarm—and the crypto world is listening.

The Government's Heavy Hand

Forfeited digital assets hitting the open market isn't new—but the scale and timing always raise eyebrows. These aren't retail trades; they're bulk transactions that can ripple across exchanges, shaking confidence and moving prices. The DOJ operates under its own rulebook, one written by prosecutors, not portfolio managers.

Senatorial Scrutiny Hits Main Street

The concern isn't just about volatility. It's about precedent. When a government agency becomes a major market participant, questions about transparency, process, and motive flood in. Are these sales executed to maximize returns for taxpayers—or are they timed to influence the broader digital asset landscape? The line between asset liquidation and market intervention gets blurry fast.

Bitcoin's Resilience Test

True believers call this another stress test for decentralized finance. Bitcoin's network doesn't care if the seller wears a hoodie or a suit—transactions verify the same. But human psychology cares. Large, opaque government sales inject uncertainty, that ancient enemy of bull markets. They remind everyone that while code is neutral, the hands holding the keys never are.

The irony, of course, is delicious. Traditional finance spends decades building circuit breakers and disclosure rules to prevent exactly this kind of opaque, large-scale market moving—unless, it seems, the government is doing the moving. Some things never change, even when the asset does.

Watch the wallets, not the headlines. The next blockchain transaction from a .gov address might tell you more than any press release ever could.

Senator Lummis Raises Alarm

Based on reports, Senator Cynthia Lummis said she was “deeply concerned” that the transfer ran counter to a presidential directive issued earlier.

The directive, Executive Order 14233 signed in March 2025, sets out a plan to create a US Strategic bitcoin Reserve and calls for seized Bitcoin to be held rather than sold.

Lummis, who chairs a Senate subcommittee on digital assets, questioned why seized coins were moved to an exchange custody account instead of being placed in reserve.

Why is the U.S. gov still liquidating bitcoin when @POTUS explicitly directed these assets be preserved for our Strategic Bitcoin Reserve? We can’t afford to squander these strategic assets while other nations are accumulating bitcoin. I’m deeply concerned about this report. https://t.co/XW5WxsfliA

— Senator Cynthia Lummis (@SenLummis) January 6, 2026

On-Chain Moves Point To Sale

Blockchain analysts flagged the movement after addresses tied to the seizure were traced to Coinbase Prime. Reports show the Coinbase address ended with a zero balance shortly after the transfer, which many observers read as an on-chain signal that the assets were sold.

Based on reports, the transfer involved digital assets seized from defendants linked to a recent criminal case, and the US Marshals Service executed the order from the Justice Department to MOVE the coins.

The market showed a small reaction around the time of the reported sale. Bitcoin’s price dipped slightly from about $94,760 to NEAR $93,600 at one point, according to price snapshots cited by news sites.

The said number of BTC is a small fraction of total circulating supply, but the trade drew attention because of the policy questions it raised and the political backdrop of a national reserve plan.

Lawmakers and crypto policy watchers now want clearer answers about when and how seized crypto is converted to cash. Reports have called for the Justice Department to explain its decision-making and to clarify whether current administration guidance requires holding seized Bitcoin for the Strategic Reserve.

Senator Lummis has pushed for formal rules and possible legislation that WOULD prevent similar sales in the future.

So far, public statements from the Justice Department and the US Marshals Service have been limited in the public record, while Lummis and other proponents of the reserve have pressed for transparency.

Based on reports, some legal experts argue the government has discretion over forfeited property, while others say the new executive directive should reshape that practice.

Featured image from Pexels, chart from TradingView