U.S. Marshals Service Seeks Custody Partner to Handle Seized Digital Assets

The United States Marshals Service (USMS) is on the hunt for a custody partner as it continues to take down cryptocurrency criminals across the country. Yesterday, industry news source The Block reported that the Marshals Service had updated a contract for crypto disposal and management service. 

Safeguarding Confiscated Assets for Auctioning

As the news source explained, the update shows that the Marshals Service is open to partnering with a firm to help manage and handle the cryptocurrencies that it seizes. The agency reportedly published five supporting documents last week, with an Evaluation Factors for Award document that described the process of storing and disposing of all seized digital assets.

“The contract will be awarded to the responsible company whose proposal conforming to the solicitation will be most advantageous to the government, based on the evaluation of Technical Capability, Past Performance, and Price,” the document reads in part.

The agency also published a Performance of Work (PoW) document, where it described the performance objectives and standards expected of the successful contractor.

Some roles of the firm will include services like customer management, accounting, audit compliance, wallet creation, and maintenance. The firm will also take charge of private key encryption, backup and recovery, airdrops, and all other future actions associated with the forfeiture process of digital assets.

Building a Management System that Works

The USMS is one of the key law enforcement agencies in the United States. It is a critical component of the Asset Forfeiture Program (AFP) from the United States Department of justice, and it has had a long history of making virtual currency seizures.

The agency conducted three Bitcoin auctions in 2018, selling 3,800, 2,100, and 660 BTC tokens in January, March, and October of the year, respectively. At the time the agency conducted the third auction, it explained in a press release that it had seized the tokens from several civil, criminal, and administrative cases.

Two of such cases involved Teresa Tetley and Tomas Costanzo. The Justice Department charged them 2017 with registering an unregistered Bitcoin-to-fiat money exchange and money laundering, respectively.

However, its largest Bitcoin auction on record happened this year. Back in February, the USMS announced that it was going to auction approximately 4,040 Bitcoins, all worth about $37.4 million at the time. Bidders were told to pay $200,000 to be part of the auction, with the agency promising to return the deposits of non-winning bidders.

Given that the Marshals Service has had success with catching crypto criminals, it only makes sense why they are looking to create a system for asset redistribution. However, this isn’t the first time that the USMS would be working towards a system for managing confiscated digital assets. Last year, the agency published documents outlining legal procedures for the management of these cryptocurrencies.

At the time, the agency explained that it was looking to create a complete and accurate accounting for its digital asset inventory. It doesn’t appear that it recorder any serious bids at the time. However, a lot of crypto firms have now shown an interest in custody services. It won’t be surprising to see most of them throw their hats in the ring.