Bitcoin-based scams mean the federal government now needs a crypto bank – Vox.com

Bitcoin-based scams mean the federal government now needs a crypto bank – Vox.com

Due to a surge of cryptocurrency-fueled crimes, federal law enforcement is seizing a lot of bitcoin. Now the US government is figuring out what to do with all of it.

This week, a small platform for safekeeping cryptocurrency called Anchorage Digital announced it had won a contract from the Department of Justice to store and liquidate digital assets that federal law enforcement seizes following criminal investigations. The government has essentially hired a bank to store and sell billions of dollars worth of forfeited cryptocurrency, including troves of bitcoin and ethereum. Anchorage Digital, which is based in San Francisco, is an obvious choice for a partner, as it’s the first federally chartered bank for crypto.

“​​There’s no traditional bank that actually offers these services because this is extremely complex from a technical perspective,” Diogo Monica, Anchorage’s co-founder and president, told Recode. “It’s very hard to store these safely. In fact, there are many, many stories of people losing access to their bitcoin and other cryptocurrency wallets and just losing access completely to them without the ability to be recovered.”

That the US Marshals Service needs to hire a cryptocurrency company for help is a reminder that, as these kinds of digital assets go mainstream, they’re also becoming more popular with criminals. In fact, as law enforcement shut down illegal cryptocurrency operations, from ransomware schemes to illegal online markets, it’s clear that the US government could hold a very large amount of bitcoin,
Source…