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US government hires San Francisco-based crypto custodian to handle seized crypto

US government hires San Francisco-based crypto custodian to handle seized crypto
Rhodilee
Jean
Dolor
2 months ago
2 mins read

The US government has hired the services of a cryptocurrency company to handle the digital assets that it seized from criminals.

In a blog post published on Thursday, cryptocurrency custodian Anchorage Digital revealed that it has been chosen by the United States Marshals Service (USMS), a bureau within the US Department of Justice (DOJ), to handle the crypto assets confiscated by law enforcement agencies.

The USMS seizes cash, real estate, art, and other assets used in the commission of a crime. Amid the growing popularity of Bitcoin (BTC) and other cryptocurrencies, the agency has also been forfeiting digital assets used in criminal activities.

Partner to handle forfeited cryptocurrencies

In 2019, USMS started to search for a partner that will handle the seized crypto assets. The announcement revealed that Anchorage Digital, the first chartered bank for crypto, has been chosen as USMS’s partner. 

“After more than a year-long process, we are proud to announce that Anchorage Digital has been selected as the provider of digital asset custody and financial services for the United States Marshals Service (USMS),” Anchorage Digital said in its statement. “This award speaks to both the quality of the platform we have developed and the stringent processes and procedures we have put in place around its use.”

The San Francisco-based firm said that it will provide the USMS a suite of cryptocurrency services such as custody, liquidation, audit compliance, management of blockchain forks, wallet creation, the transformation of token assets into coin assets, and actions associated with the forfeiture process of virtual currencies.

“​​There’s no traditional bank that actually offers these services because this is extremely complex from a technical perspective,” Anchorage’s co-founder and president told Recode. “It’s very hard to store these safely. In fact, there are many, many stories of people losing access to their bitcoin and other cryptocurrency wallets and just losing access completely to them without the ability to be recovered.”

Cryptocurrency being used in criminal activities

Authorities have raised concern that cryptocurrencies are being used in criminal activities.

In June, the DOJ announced that it seized 63.7 BTC worth $2.3 million at the time. The funds are allegedly the proceeds of a ransom payment made to members of the DarkSide group behind the Colonial Pipeline hacking incident.

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Rhodilee Jean Dolor
Author

Rhodilee Jean Dolor is an experienced journalist covering finance, business, digital assets news. She aims to bring accurate and verified information to Finbold readers daily.