In recent years, cryptocurrencies like Bitcoin and Etherum have become more mainstream forms of currency, being used to buy and sell everything from the buzzworthy NFT artwork to everyday home improvement supplies from major retailers like Home Depot and Overstock. Since their inception, however, cryptocurrencies have been closely tied to criminal activity due to the difficulty in tracking the transactions back to individuals. Despite being more widely understood, bitcoin-based scams and illegal activities have increased significantly which forced the federal government to find ways to store and liquidate the money seized from crypto-related crimes.
The US Marshals Service, which runs the Department of Justice (DOJ) asset forfeiture program, has turned to Anchorage Digital for help in managing these crypto assets, from pricing, safe keeping and liquidating, which is a complicated matter given how volatile the market is.
Anchorage Digital, a small San Francisco-based tech company, announced in July 2021 that it had won a government contract to become the official crypto bank for the DOJ according to a recent article by Vox Media. Anchorage Digital was also the first federally chartered bank for cryptocurrencies, granted conditional approval by the Office of the Comptroller of the Currency (OCC) in January 2021.
The DOJ’s influx of seized Bitcoin and Ether come after a slew of crypto crackdowns have filled the government coffers. Some of these include “$2.3 million worth of bitcoin the FBI had obtained after tracking the movement of a ransom payment associated with the Colonial Pipeline cyberattack” and $1 billion acquired from Silk Road founder Ross Ulbright who was convicted of money laundering and dealing narcotics.
