The US Department of Justice’s asset forfeiture agency, the US Marshals Service (USMS), has reached a partnership agreement with Coinbase. In the future, Coinbase Prime will provide custody and trading services for high-value cryptocurrencies such as Bitcoin for the agency.
According to the report, the USMS has chosen Coinbase Prime to provide custody and advanced trading services for high-value cryptocurrencies, including Bitcoin, seized from cases. These cryptocurrencies will be held in custody by Coinbase Prime for a period of five years, and sales may also be conducted on the Coinbase Prime platform. This partnership represents the latest collaboration between a US government agency and a cryptocurrency exchange.
Additionally, it has been reported that the US Department of Justice (DOJ) has paid Coinbase a service fee of $32.25 million for the custody and processing contract.
It is well-known that the US government holds the largest amount of Bitcoin. As of June 27th, the US government held over 213,000 Bitcoins, valued at over $12.97 billion. These Bitcoins were seized in law enforcement actions related to Silk Road, the Bitfinex hack, and hacker James Zhong.
According to Lin Chen, the head of Deribit’s Asia Pacific business, the USMS chose to partner with Coinbase after conducting a competitive due diligence process and evaluating a range of solutions. Coinbase was selected due to its strong performance record and its ability to provide institutional-grade secure cryptocurrency services on a large scale.
Coinbase has stated that their support for law enforcement agencies can be traced back to the establishment of their law enforcement program in 2014. The company has a long history of working with major federal, state, and local US agencies, as well as global international organizations.
Coinbase Prime is the exchange’s primary platform for institutional investors, providing solutions for managing cryptocurrency assets. Since its launch in 2021, Coinbase Prime has become the preferred platform for institutions and large digital asset holders, as well as a major partner for most cryptocurrency spot ETFs.
However, despite becoming a partnership platform for a US Department of Justice agency, Coinbase’s lawsuit with the US Securities and Exchange Commission (SEC) remains unresolved.
The SEC filed a lawsuit against Coinbase in June last year, alleging that the company had violated securities laws by offering trading, brokerage, and clearing services for unregistered securities and charging fees for lending services. In late March of this year, Coinbase’s motion to dismiss the lawsuit was denied by a judge, allowing the SEC to continue its lawsuit. The judge ruled that most of the SEC’s allegations were reasonable.
The legal battle between Coinbase and the SEC is considered one of the most closely watched lawsuits in the cryptocurrency industry, as its outcome could have significant implications for cryptocurrency regulation and the industry’s development in the United States.