Coinbase’s Regulatory Spotlight Intensifies as U.S. Government’s Bitcoin Liquidation Sparks Legal Clash Over Strategic Reserve Mandate

In a development with significant implications for cryptocurrency exchanges like Coinbase, U.S. Senator Cynthia Lummis has launched a sharp critique against the Department of Justice (DOJ) for its recent liquidation of 57.5535 Bitcoin (BTC). The action, taken in early January 2026, directly contravenes Executive Order 14233, signed by former President Donald Trump, which mandates that all Bitcoin seized by the U.S. government be preserved in a dedicated Strategic BTC Reserve. The controversy stems from the DOJ's decision to sell Bitcoin obtained through a criminal settlement, specifically from assets linked to the now-defunct Samourai Wallet. Blockchain forensic analysis confirms the transfer of the contested funds from a known government-controlled wallet to an exchange, presumably for conversion to fiat currency. This move has ignited a fierce debate over federal cryptocurrency asset management and compliance with standing executive mandates. For major regulated exchanges such as Coinbase, this incident underscores the complex and often contradictory regulatory landscape they must navigate. It highlights the tension between law enforcement's operational disposal of assets and legislative or executive directives aimed at long-term strategic holding. The senator's public ire signals heightened political scrutiny over how government agencies handle digital assets, a factor that could influence future regulations governing exchange operations, compliance reporting, and asset custody protocols. The situation also raises questions about market impact and the precedent set by government sales, which can affect liquidity and price stability—key concerns for exchange platforms and their users. As a cornerstone of the U.S. crypto economy, Coinbase's business environment is directly shaped by such federal actions and the ensuing political responses, making this a critical watchpoint for institutional and retail investors alike in the evolving digital finance sector.

U.S. Government's Bitcoin Liquidation Draws Senator's Ire Amid Reserve Order

Senator Cynthia Lummis has sharply criticized the Department of Justice for liquidating 57.5535 BTC obtained through a criminal settlement, directly challenging compliance with Executive Order 14233. The order, signed by President Trump, mandates all seized Bitcoin be preserved in a Strategic BTC Reserve.

Blockchain data reveals the contested bitcoin was transferred from a wallet linked to Samourai Wallet founders to a Coinbase Prime address, which now shows a zero balance. This $6.37 million transaction directly contradicts the administration's preservation directive for Government BTC.

The MOVE raises fundamental questions about institutional cryptocurrency policy enforcement. Lummis's intervention highlights growing tensions between legislative intent and executive branch implementation in digital asset management.

Goldman Sachs Upgrades Coinbase to Buy Amid Crypto Sector Recovery

Goldman Sachs has upgraded Coinbase from 'neutral' to 'buy,' setting a 12-month price target of $303 per share. The upgrade reflects growing confidence in infrastructure-focused crypto firms as the market recovers. Coinbase shares surged 7.77% following the announcement, closing at $254.92.

Analysts project 12% annual revenue growth for Coinbase through 2027, with subscription services now accounting for 40% of total revenue. The upgrade marks Goldman's first bullish rating on the exchange since 2021.

Regulatory progress and a resilient trading environment underpin the optimistic outlook. 'We expect the meeting of regulatory clarity and institutional adoption to drive the next phase of growth,' said Goldman analyst James Yaro.

Coinbase Challenges Banking Rule as Crypto Crackdown Tool

Coinbase has formally contested a banking regulation it alleges was weaponized to pressure financial institutions against servicing crypto firms. The exchange endorsed a joint proposal by the OCC and FDIC to eliminate 'reputational risk' from supervisory guidelines—a vague standard it claims regulators exploited to isolate digital asset businesses.

Internal communications reveal coordinated efforts to sever crypto firms' banking access, according to Coinbase. Chief Policy Officer Faryar Shirzad condemned the rule as a politically motivated tool, urging its complete removal to prevent further misuse against lawful industry participants.