The US Marshal Service, a division of the US Department of Justice responsible for asset forfeiture, has selected Coinbase as its custody provider for handling large-cap digital assets. This decision comes after a careful evaluation process conducted by the agency.
Coinbase announced the collaboration in a recent blog post, highlighting the selection of Coinbase Prime to provide custody and advanced trading services for the agency’s centrally managed “Class 1” digital assets used in federal law enforcement efforts.
Government Partnership Secured by Coinbase
After a thorough due diligence process, the US Marshal Service opted for Coinbase due to its secure institutional-grade crypto services and track record in managing digital assets at scale. The agency emphasized the need for reliable storage and liquidation methods to manage and dispose of substantial quantities of popular cryptocurrency assets.
This partnership is expected to streamline the custody, management, and disposal processes for cryptocurrency assets, enabling diversification in the types of digital assets handled and disposed of under government forfeiture programs.
Coinbase highlighted its longstanding support for law enforcement agencies and collaborations with various federal, state, and local authorities in the US and globally. The exchange reaffirmed its commitment to promoting safe and efficient markets through partnerships with law enforcement agencies.
Revealing Regulatory Disparity?
While being selected by the US Marshal Service demonstrates Coinbase’s capability to serve government entities, the exchange has faced regulatory challenges from agencies like the US Securities and Exchange Commission (SEC).
Despite regulatory scrutiny, the US government transferred over 3,940 BTC valued at $241 million to Coinbase, seized from a drug dealer during a trial in January 2024. Pro-crypto lawyer John E. Deaton criticized the government’s actions, highlighting inconsistencies in its stance on cryptocurrency.
Deaton pointed out the contradiction in the US government using Coinbase for Bitcoin transactions while the exchange faces allegations of unlawful activities from the SEC and its chairman. This situation raises concerns about regulatory coherence and alignment in the cryptocurrency space.
Clarity and consistency between regulatory bodies and government agencies are essential to create a supportive environment for the crypto industry. The incident underscores the need for a more predictable regulatory framework.
