The US government has announced it is using American crypto exchange Coinbase to custody its digital assets.
The U.S. Marshals Service (USMS), a sub-tier of the Department of Justice (DOJ), has revealed that it is custodying digital assets with Coinbase as part of its program to manage and dispose of large amounts of “Class 1” cryptocurrencies.
“The U.S. Marshals Service (USMS) Department of Justice (DOJ), on behalf of the Asset Forfeiture Division (AFD) has a requirement for managing and disposing of large quantities of popular cryptocurrency assets, known as Class 1 cryptocurrencies. This will require the use of multiple, industry leading, storage and liquidation techniques employed in a manner that is professional, lawful, and consistent with Department and USMS policy.
This contract will also streamline custody, management, and disposal processes for cryptocurrency assets while allowing for the diversification of the type of cryptocurrency assets that can be managed and disposed of under the Government’s forfeiture programs.”
According to the government, it has a $32.52 million contract with Coinbase to run the program.
In a blog post, Coinbase says it has a “longstanding history” of working with government agencies.
“Coinbase has a longstanding history of supporting law enforcement agencies, dating back to the founding of our law enforcement program in 2014. Today, Coinbase works with every major U.S. federal, state, and local law enforcement agency, as well as international agencies on every continent.
Growing the cryptoeconomy means promoting safe and efficient markets, and these partnerships are critical to our mission.”
Despite the government using Coinbase to hold and trade cryptocurrencies, the U.S. Securities and Exchange Commission (SEC) is in the middle of a lawsuit against the exchange under allegations that it is selling unregistered securities.
Coinbase’s chief legal officer Paul Grewal has said that the SEC is bent on “choking” the industry.
“Remarkably, the SEC says – over and over again – that it doesn’t matter if the industry can comply with the rules. The SEC is bent on choking the digital asset industry and is refusing to provide the necessary rules the industry has requested in order to tighten the squeeze.”
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