Anchorage Digital, a firm offering institutional custody solutions for crypto assets, announced on July 28th that it had been chosen by US Marshals to custody seized digital assets.
According to the company’s press release, the decision was the result of a year-long process in which the United States Marshals Service (USMS) finally selected Anchorage to assist with the operations of the Asset Forfeiture Division of the agency.
The division removes financial incentives for federal crimes in order to “enhance public safety and security”, with the seizure of assets used or proceeding from federal crimes being the main curse of action. The USMS has seized an increasing number of digital assets over the years alongside cash, real estate, and art.
The partnership will result in Anchorage being responsible for providing the agency with “a full suite of cryptocurrency services, including custody, liquidation”, as well as “such activities as accounting, customer management, audit compliance, managing blockchain forks, wallet creation, the transformation of token assets into coin assets, etc., as well as future actions associated with the virtual currency forfeiture process.”
The Department of Justice, under which the USMS serves, has been increasing its efforts to seize cryptocurrencies resulting from illicit activity, which has been seen by regulators as one of the major concerns around crypto-assets.
Enforcement Agencies Have Their Eyes Set On Crypto
The US Marshals have been looking into options to custody seized crypto assets since 2019, the year in which it published a contract opportunity for “cryptocurrency management and disposal services”.
BitGo won a contract from the USMS back in April of 2021 but the current status of said contract is unknown at the time.
Back in 2017, the US Marshals seized $48 million worth of Bitcoin recovered from Ross William Ulbricht’s laptop, with all the BTC proceeding from the operation of one of the largest black-market bazaars in history: Silk Road.
Ever since, the agency has continued to seize cryptocurrencies as a result of crackdowns on illicit activity, with the total of BTC seized accounting for more than $7.2 billion since 2014, according to CNBC.
One of the most recent operations by the US government was the recovery of BTC paid as ransom to the hackers behind the Colonial Pipeline ransomware attack, in which the Department of Justice recovered $2.3 million worth of Bitcoin after the department gained access to wallets via unknown means.
Is Crypto The Tool Of Choice For Criminals?
US enforcement agencies like the US Marshals and FBI have set their eyes on crypto in recent years, which is the result of digital money becoming increasingly important on the global stage.
Back in January, Secretary of the treasury Janet Yellen said that crypto was “a particular concern” in regards to criminal activity and terrorism financing.
Officials in all levels of the government have exaggerated the role that cryptocurrencies play in crime, having doubled down even when several studies probe their claims are unfounded.
A 2021 report by Chainalysis showed that in 2020, only 1% of crypto’s total transaction volume was the result of criminal activity.
The report not only found that “Cryptocurrency-related crime is falling, and it still remains a small part of the overall cryptocurrency economy” but also that “the criminal share of all cryptocurrency activity fell to just 0.34%”.
Other organizations like the United Nations have estimated that about 2% and 5% of global GDP is connected to illicit activities, which would suggest that cryptocurrency is nothing but a really small share when compared to fiat.
The narrative that crypto is preferred by criminals is not only wrong but also dangerous, and shows that there is likely an organized campaign to negatively impact cryptos.