- Coinbase has been chosen as the custody provider for large-cap digital assets by the US Department of Justice’s asset forfeiture division, the US Marshal Service.
- The partnership focuses on Coinbase Prime’s ability to offer custody and advanced trading services for “Class 1” digital assets.
- “Today, Coinbase collaborates with every major U.S. federal, state, and local law enforcement agency, as well as international agencies worldwide,” stated Coinbase in a recent blog post.
Coinbase partners with the US government for cryptocurrency custody, enhancing their position amidst ongoing regulatory scrutiny.
Coinbase Secures Major Government Contract
The US Marshal Service carried out extensive due diligence before selecting Coinbase, praising its proven record and ability to deliver institutional-grade crypto services on a large scale. This agency needs dependable storage and liquidation solutions to handle significant amounts of popular cryptocurrency assets, known as Class 1 cryptocurrencies, in alignment with policies from the Department of Justice and the US Marshal Service.
This collaboration is expected to improve the handling and disposition procedures for cryptocurrency assets, thereby diversifying the types of digital assets that fall under the government’s forfeiture programs.
Regulatory Challenges in the Spotlight
Despite being chosen as a partner by the US Marshal Service, Coinbase faces regulatory hurdles, particularly from the US Securities and Exchange Commission (SEC). Yet, the US government recently transferred over 3,940 BTC, valued at $241 million, to Coinbase, following their seizure from a criminal case.
Prominent crypto advocate John E. Deaton criticized this move, pointing out the seeming contradiction in the government’s actions. He highlighted how the government relies on Coinbase for major transactions while the SEC accuses the exchange of illegal activities.
Deaton specifically mentioned SEC Chairman Gary Gensler and US Senator Elizabeth Warren, pointing out the irony of Gensler, who has been vocally critical of Coinbase’s operations, indirectly endorsing its services through these governmental transactions.
This inconsistency shows a need for more coherent regulations and operational alignment within the government concerning the cryptocurrency sector.
Conclusion
In conclusion, while Coinbase’s new role with the US Marshal Service marks a significant milestone, it also shines a light on the complex and often contradictory regulatory landscape surrounding cryptocurrencies. The partnership underscores the importance of clear, aligned policies to support the evolving digital asset economy.
