Bitgo Chosen to Manage Seized Cryptocurrencies for the US Marshals Service
The U.S. Marshals Service has published a contract showing the crypto custodian Bitgo has been chosen to manage law enforcement’s seized bitcoin acquired through criminal forfeiture. The contracted deal is $4.5 million for the storage, maintenance, and disposal of cryptocurrencies according to documents released on Wednesday.
USMS Pens a Deal With Bitgo
During the last ten years, the U.S. government has seized a
substantial amount of bitcoin (BTC) and other digital assets from criminal
forfeiture cases. Traditionally, the U.S. Marshals Service (USMS) has been in
charge of these funds stemming from high-profile cases like the Silk Road
marketplace investigation.
Since 2019, the USMS has been in search of a recruit or a
custodian that can manage the crypto assets seized by the U.S. government. The
government entity published another offering on April 24, 2020, for a contract
worth $4.5 million.
“The United States Marshals Service (USMS) has a requirement
for storage, maintenance, and disposal of seized/forfeited virtual currency,”
the USMC’s original solicitation notes. “The purpose of this contract is to
provide the full range of virtual currency management and disposal services.
This includes but is not limited to such activities as accounting, customer
management, audit compliance, managing blockchain forks, wallet creation and
management, private encryption key generation and safekeeping, backup and
recovery of private encryption key material, airdrops, etc., as well as future
actions associated with the virtual currency forfeiture process.”
Over $4.5 Million for Managing Crypto Seized in Criminal
Forfeiture
On April 21, 2021, the contract was awarded to Bitgo, the
digital asset trust company and security company, headquartered in Palo Alto.
The length of the contract has not been disclosed in the contract filings.
Prior to Bitgo’s partnership with the law enforcement agency, the USMC, FBI, and
Department of Justice handled storage and auctions.
Just recently, the department revealed it had seized over $1
billion in bitcoin from the Silk Road marketplace. The criminal forfeiture
stemmed from a person dubbed “Individual X” and it is assumed that the person
may be one of the rogue agents who got caught stealing bitcoin during the
investigation.
The company founded by Mike Belshe and Ben Davenport in 2013
has grown a great deal since Bitgo’s inception. The firm already manages
billions of dollars worth of crypto assets and is the custodian for the Wrapped
Bitcoin (WBTC) project as well. The BTC held in custody for the WBTC project is
approximately 156,087 BTC according to Dune Analytics stats.
The deal with the USMS may see Bitgo dealing with a significant
sum of cryptocurrencies from ill-gotten gains going forward. The Palo Alto
company will get $4,549,672 for dealing with the U.S. government law
enforcement agency and meeting the contract requirements.
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