U.S. Marshals Service hires custodian to hold crypto seized in criminal activity

U.S. Marshals Service hires custodian to hold crypto seized in criminal activity

The U.S. Marshals Service, one of the primary law enforcement agencies of the U.S. Department of Justice, has hired crypto custodian Anchorage Digital to custody its seized cryptocurrency.

The U.S. Marshals Service has spent more than a year seeking a custodian and financial services provider for its stockpile of crypto seized or forfeited in various criminal cases. The contract was previously awarded to BitGo, which was acquired in May by Galaxy Digital.

The agency, whose Asset Forfeiture Division seizes different assets to remove financial incentives for crime operations – which often also include real estate, art, vehicles, jewelry, cash and other financial instruments – sought a partner to help it manage cryptocurrencies.

Anchorage provides crypto financial services to institutions ranging from young digital-first banking apps to bulge bracket banks. The company will provide custody and liquidation services, which could include accounting, customer management, audit compliance, managing blockchain forks, wallet creation, transforming token assets into coin assets, as well as future actions associated with the virtual currency forfeiture process.

"Critical, reliable infrastructure will be the most important factor in a stable crypto asset class," Diogo Monica, president and cofounder of Anchorage Digital, 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 USMS' 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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