The earlier crypto custodial of the US Marshals Service has been substituted with Anchorage Digital on the instructions of the US Department of Justice (DOJ). Anchorage Digital has now been engaged for the safekeeping and security of the crypto assets that the US Marshals Service has brought into its possession through seizure during investigation operations.
US Marshals Service is the major law enforcement agency working under the directions of the US Department of Justice (DOJ). During investigative operations, the agency also seizes goods that are found in the possession of the accused or arrested individuals. Sometimes, seizing cryptocurrencies, especially Bitcoins, is a matter of routine for the agency. However, since crypto is contained in encrypted data digitally, therefore, the agency uses the service of crypto custodians. When the trial proceeds and DOJ decides to confiscate the seized virtual assets, then the seized virtual assets are sold in an auction. Since when the agency had been seizing cryptocurrencies, it has sold about 185,000 units of Bitcoins.
Normally the custodial services are obtained under a contract that usually ends after a certain period. It has been reported recently that the agency has hired a new custodial firm. As per the announcement, the task of crypto custodial services has been assigned to Anchorage Digital.
The responsibility of Anchorage Digital would be to ensure the safe-keeping and security of the seized virtual assets. When they are required to be auctioned by the agency, Anchorage Digital would be required to deliver the assets on demand.
The engagement agreement was duly disclosed by Anchorage Digital as well. The custodian announced that a contract for rendering crypto custodial services has been entered into between the agency and the firm. The firm also told that apart from ensuring custody of seized crypto, the firm will also be rendering various other services. For instance, the contract between the two provides for liquidation of seized goods, audit compliance, customer management, developing crypto wallets, etc. In addition, the firm would also be managing forks with respect to blockchain on behalf of the agency. Similarly, if the agency would want to convert the tokenized crypto into virtual currencies, the conversion will be done by Anchorage Digital.
Before engaging Anchorage Digital for crypto custodial services, in April 2021, US Marshals Service had engaged Bitgo. However, when Bitgo was taken on board, it underwent acquisition and was acquired by a crypto trading platform called Galaxy Digital. But within a period of one month after hiring Bitgo, the agency started to look for Bitgo’s substitute on the directions of DOJ. To date, it is not clear what were the reasons why Bitgo’s services were not utilized and why Bitgo was replaced. It was also on record that it took at least a year for DOJ/US Marshals Service to engage Bitgo. However, the contract ended quicker than expected.
Now the responsibility has been overtaken by Anchorage Digital and the new custodial is optimistic about a long-term healthy relationship with its employer.