The U.S. Marshals Service, one of the primary law enforcement agencies of the United States Department of Justice, has contracted Coinbase Prime to custody and offer advanced trading services for its “Class 1” large-cap digital assets.
Coinbase Bags Major Gov’t Contract
Coinbase was chosen after a competitive bidding process that evaluated a variety of solutions. The firm’s strong track record and ability to securely provide institutional-grade crypto services at scale were key factors in the decision, according to the Monday official blog post.
The U.S. Marshals Service indicated in a previous statement about the opportunity for a contract it has a specific requirement for “managing and disposing of large quantities of popular cryptocurrency assets.”
The contract is structured as a single-award Indefinite Delivery/Indefinite Quantity (IDIQ) agreement with an initial ordering period of five years, which could be extended for up to six months.
The deal aims to streamline crypto asset custody, management, and disposal processes while expanding the range of digital assets that can be handled under the government’s forfeiture programs.
It’s worth mentioning that Coinbase Prime custodies roughly eight of the 11 U.S.-listed spot Bitcoin exchange-traded funds (ETF). Since its launch about three years ago, Coinbase Prime has emerged as a preferred platform for institutions and big cryptocurrency holders. As of March 31, 2024, Coinbase’s service safeguarded $330 billion in assets and registered over $250 billion in institutional trading volume in Q1 2024.
According to government records, Coinbase Prime was paid over $32 million for the USMS contract. This contract marks a huge step in incorporating crypto management into federal law enforcement processes. It also underscores the increasing acceptance of crypto assets in government operations and the need for specialized services to manage them securely and competently.
Coinbase And U.S. Agencies
Coinbase’s relationship with law enforcement agencies spans as early as 2014, as per the company’s July 1 post. Coinbase is currently working with major US federal, state, and local bodies, as well as international agencies across the globe.
The contract comes as Coinbase has found itself in the crosshairs of the United States Securities and Exchange Commission. The regulator launched a lawsuit against Coinbase in June 2023 for allegedly operating its platform without registering.
The crypto exchange also sued the SEC and the Federal Deposit Insurance Corporation last week, alleging that the government agencies failed to comply with Freedom of Information Act requests and are trying to cut off the crypto industry from the banking sector.
