Wednesday, October 20, 2021

U.S. Marshals Service Hires Custodian to Hold Cryptocurrency Seized in Criminal Activity

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The Marshals Service has spent more than a year seeking a custodian and financial services provider for its stockpile of seized crypto. The contract was previously awarded to BitGo, which was acquired in May by Galaxy Digital. The U.S. Marshals Service, one of the primary law enforcement agencies of the Department of Justice, has hired custodian Anchorage Digital for cryptocurrency seized or forfeited in various criminal cases.

Anchorage will provide custody and liquidation services, which could include accounting, customer management, managing blockchain forks, transforming token assets into coin assets as well as future actions associated with the USMS virtual currency forfeiture process.

The agency’s Asset Forfeiture Division removes financial incentives for crime operations, which often also include real estate, art, vehicles, jewelry and cash.

“Critical, reliable infrastructure will be the most important factor in a stable crypto asset class,” Anchorage Digital President and co-founder Diogo Monica told CNBC.

The agency has auctioned bitcoin since at least 2014. In addition to investing in dozens of crypto start-ups, much of venture capitalist Tim Draper’s bitcoin fortune came by winning the U.S. Marshals Service’s 2014 auction of 30,000 confiscated bitcoins from the now-defunct Silk Road.

The Marshals Service has seized and sold more than 185,000 bitcoins worth more than $7.2 billion since about 2014. It most recently auctioned 4,040 bitcoins in early 2020.

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