While the U.S. Marshals Service (USMS) is responsible for managing seized cryptocurrency assets worth hundreds of millions, they’re basically tracking it all on spreadsheets. Yes, spreadsheets. In 2021, they were sitting on nearly $466 million in digital assets from almost 200 Department of Justice seizures – and keeping tabs on it like it’s their grandmother’s recipe collection.
The situation is messier than a digital wallet after a hack. With 22 different types of cryptocurrency under their watch, the USMS lacks proper systems for tracking these assets. Their official asset management system doesn’t even have cryptocurrency functionality. Instead, they’re relying on supplemental spreadsheets with no documented procedures. The surging rise of illicit crypto transactions reaching $24.2 billion in 2023 makes this tracking problem even more concerning. What could possibly go wrong? Similar to how market capitalization reflects theoretical value rather than actual invested money, these tracking methods may not accurately represent the true value of seized assets.
Tracking billions in seized crypto with basic spreadsheets – the USMS needs a serious digital upgrade before disaster strikes.
The problems don’t stop there. The USMS is dealing with inadequate policies for everything from storage to disposal. They can’t even figure out how to handle forked assets – those pesky cryptocurrency splits that create new tokens. It’s like trying to catch digital fish with a paper net. Some guidance contradicts itself, and there’s no established process for recording these assets. Money could literally be disappearing into the blockchain void. The 2022 Inspector General’s report revealed major security gaps in their crypto handling practices.
Thankfully, the USMS isn’t completely clueless. They’re in the process of outsourcing their cryptocurrency management to contractors. But here’s the kicker – they need to establish proper policies before handing over the keys to the digital kingdom. It’s like hiring a housesitter before installing locks on the doors.
The challenges are real. Bitcoin’s pseudo-anonymous nature makes tracking a nightmare, and criminals aren’t making it easier with their mixers and tumblers obscuring transactions. Law enforcement is playing catch-up while digital criminals zip across borders with their ill-gotten gains.
The Office of Inspector General made seven recommendations to fix this mess, and the USMS agreed to all of them. At least they’re admitting there’s a problem. Now they just need to drag their asset management system into the 21st century before more cryptocurrency slips through their digital fingers.
