The U.S. government has seized $1.2 billion worth of cryptos so far this year. Now, the crypto seizure and sale operation is growing so fast that the government just enlisted the help of the private sector to manage the storage and sales of its hoard of crypto tokens, CNBC reports.

                By                    Yaёl Bizouati-Kennedy

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“In fiscal year 2019, we had about $700,000 worth of crypto seizures. In 2020, it was up to $137 million. And so far in 2021, we’re at $1.2 billion,” Jarod Koopman, director of the IRS’ cybercrime unit, told CNBC.

Just last week, after more than a year-long process, the U.S. Marshals Service, a principal law enforcement agency within the Department of Justice and a key component within the Department’s Asset Forfeiture Program, hired custodian Anchorage Digital to help the agency manage its crypto seizures.

Anchorage will be responsible for providing a full suite of cryptocurrency services, including custody, liquidation, and “such activities as accounting, customer management, audit compliance, managing blockchain forks, wallet creation, transformation of token assets into coin assets, etc., as well as future actions associated with the virtual currency forfeiture process,” according to a statement.

The crypto assets are seized in various federal criminal, civil and administrative cases, according to the USMS website.

“The amounts of cryptocurrency being seized is a credit to the agents who are taking on these complex investigations and the support they receive from private sector companies,” Callahan adds.

He explains that, unlike traditional fiat money laundering investigations, agents need to rely upon specialized software to track and trace the flow of cryptocurrencies such as bitcoin and ethereum, they also need to closely coordinate with private companies who have the technical capability to seize digital assets.

“Seizing a phone or computer is a seizure of a phone or a computer, not necessarily a seizure of a digital asset which may reside on another platform and accessible to the violator or co-conspirators,” he says. 

In addition, the USMS has also a so-called Complex Asset Unit, designed to assist in complex cases where action needs to be taken within the legal framework for seizures to protect the assets- whether it’s boats, planes, art, jewelry or cryptos.

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“The same is true for crypto, which is why Anchorage was recently awarded a custody contract,” he says. “The proceeds from the Asset Forfeiture program go toward funding the program, compensating victims (think Bernie Madoff), and supporting law enforcement operations.”

For example, in February 2020, the USMS auctioned off 4,041.58424932 bitcoin, according to an auction notice on their website. This bitcoin was forfeited in dozens of various federal criminal, civil and administrative cases. A deposit of $200,000 was required to be considered as a potential bidder and bids had to be all-cash offers, in U.S. dollars.

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