According to a Bloomberg investigation, the US Strategic Bitcoin Reserve is stuck in a jurisdictional dispute. The clash pits the Treasury against the Commerce Department. At the same time, it remains unclear whether the state can hold Bitcoin indefinitely given its price volatility.
The Strategic Bitcoin Reserve is a government reserve program. The federal government funds it primarily with Bitcoin from criminal and civil forfeitures. In other words, it consists of Bitcoin that US authorities seized during investigations and court proceedings. Subsequently, these holdings pass into federal ownership. The founding order prohibits any sale of these holdings. At the same time, the program aims to position the United States as a global hub for cryptocurrencies. Alongside it, a separate US Digital Asset Stockpile manages other seized crypto assets. Trump signed Executive Order 14233 in March 2025 and tasked the Treasury and Commerce departments with budget-neutral acquisition strategies. In addition, all federal agencies had to disclose their digital asset holdings. The federal holdings now stand at over $20 billion in Bitcoin. According to Arkham Intelligence, this ranks the United States among the largest known sovereign holders. However, the Bloomberg investigation now shows that the legal basis for it is still missing.
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Turf war between Treasury and Commerce blocks the reserve
At the center of the investigation lies a simple but unresolved question. It concerns which agency may even manage the reserve. Initially, doubts emerged over whether the Treasury Department can legally hold the assets. The two departments pursue different mandates. The Treasury traditionally manages the federal government's assets, whereas the Commerce Department is responsible for economic and trade policy. As an alternative, the administration is therefore examining whether to house the reserve within the Commerce Department instead. As a result, 16 months after the founding order, it is not even settled who operationally controls the sovereign fund. Originally, the Executive Order tasked both departments jointly, without clearly assigning responsibility. Moreover, the order gave the Treasury 60 days to submit legal recommendations along with any necessary legislative changes. That deadline passed without a robust structure emerging.
The Justice Department's Office of Legal Counsel stepped in during this period. This division authoritatively interprets for the executive branch what is legally permissible. In contested questions of authority, its assessment therefore often proves decisive. The office stated that it works closely with the Treasury and Commerce departments. Furthermore, the DOJ is searching for legally viable options for implementation. This cautious wording suggests that a workable structure is still lacking. Neither the Treasury nor the Commerce Department responded to requests. The White House publicly stands by the project, yet indirectly concedes that the structure remains open.
"President Trump campaigned on a vision of establishing America as the global capital for cryptocurrencies and other future technologies. To realize this vision, the Trump administration continues to examine the best structure for the Strategic Bitcoin Reserve and the US Digital Asset Stockpile." - Liz Huston, White House spokesperson
The statement, however, contains no concrete commitments on a timeline or a responsible agency.
Indefinite Bitcoin holding period remains legally in limbo
Beyond jurisdiction, the Executive Order raises a second legal question. It stipulates that the reserve holdings must be held indefinitely and never sold. Whether an asset as volatile as Bitcoin can be held permanently remains, according to Bloomberg, unresolved. Notably, this is precisely where the political ambition collides with the practical design. Holding permanently binds the state to a price that fluctuates heavily, without any provision for an emergency sale.
The White House provided its rationale for the sale ban back in March 2025. Previous administrations often sold seized Bitcoin quickly and at lower prices than today. Premature Bitcoin sales had previously cost the federal government more than $17 billion. Therefore, the order explicitly treats Bitcoin as a long-term reserve asset. The price volatility, however, leaves this principle facing an open legal question.
Congress aims to secure the strategic Bitcoin reserve by law
Parallel to the executive uncertainty, Congress is trying to anchor the reserve in legislation. A law would additionally give the reserve a permanent foundation that an Executive Order does not provide. Otherwise, a successor in the White House could repeal the order at any time. Senator Cynthia Lummis and Representative Nick Begich originally introduced the BITCOIN Act in March 2025. The draft provides for the purchase of up to 1 million Bitcoin over five years, financed through budget-neutral strategies.
So far, the initiative has made little progress. The BITCOIN Act is now part of the broader market structure legislation surrounding the Clarity Act. This legislation is meant to clarify which agency oversees which crypto assets. Lawmakers delayed a markup scheduled for January 2026. Republicans and Democrats could not agree on stablecoin interest and DeFi regulation. Consequently, the legislative safeguard also hangs on a deadlocked process.
Begich and Representative Jared Golden opened a second path later, in May 2026. Their bipartisan American Reserve Modernization Act would explicitly anchor the Strategic Bitcoin Reserve within the Treasury Department. In addition, it would provide a separate stockpile for non-Bitcoin holdings. Thus, the draft addresses precisely the jurisdictional question that the executive branch has so far failed to resolve.
Federal Bitcoin holdings above $20 billion without a legal framework
Despite all the open questions, the holdings themselves remain substantial. The federal government holds Bitcoin worth more than $20 billion. According to Arkham Intelligence, this ranks it among the largest known sovereign holders worldwide. A fortune of this magnitude therefore still moves without a clarified legal framework. Ultimately, a robust solution requires either the stalled legislative initiatives or a new executive structure.
On the political level, meanwhile, all remains quiet. Patrick Witt, the White House's crypto adviser, had promised a major announcement on the next steps in April 2026. It was supposed to follow in the subsequent weeks. So far, it has failed to materialize. Overall, the reserve stands as a symbol of a crypto policy. That policy advances more slowly than the founding narrative suggested.
