The U.S. Marshals Service (USMS) has selected Coinbase Prime for the custody and trading of seized digital assets. This decision comes after a strict selection process, as disclosed by the Department of Justice agency on July 1.
Details of the Coinbase Prime agreement
The U.S. Marshals Service has assigned Coinbase the task of managing their “Class 1” large-cap cryptocurrencies seized in federal law enforcement operations. This decision came after a thorough assessment of different options, with Coinbase standing out as the preferred provider due to its established reputation for delivering secure, high-quality crypto services on a large scale.
This collaboration signifies a key moment in Coinbase’s long-standing relationship with law enforcement entities. Since 2014, the firm has worked closely with various U.S. federal, state, and local agencies and global organizations.
The agreement, designed as a single-award Indefinite Delivery/Indefinite Quantity (IDIQ) contract, features an initial ordering period of five years, with a potential extension of six months if required. The USMS is working towards enhancing its procedures for the custody, management, and disposal of cryptocurrency assets.
Coinbase Prime was introduced almost three years back and has swiftly emerged as the platform of choice for institutions and significant cryptocurrency holders. By the end of March 31, 2024, the platform had safeguarded assets worth $330 billion while facilitating a substantial $256 billion in institutional trading volume in Q1 of the same year.
However, this partnership has started up some controversy. A crypto enthusiast, Mike Dudas, pointed out a seeming inconsistency in the government’s stance. In an X post, he highlighted the SEC’s lawsuit against the crypto exchange favored by the U.S. government.
Despite using Coinbase for custody and trading, the government permits it to serve as a surveillance-sharing exchange for spot ETFs. The complexity of this situation is truly remarkable.
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