U.S. Marshals Want Help Disposing of Virtual Currencies
Wit Olszewsk/Shutterstock.com
By
Aaron Boyd
The service is gathering market research on vendors capable of storing and disposing of cryptocurrencies seized during investigations.
The U.S. Marshals Service confiscates millions of dollars worth of cryptocurrency every year through seizure and forfeiture during criminal investigations. Holding on to virtual currency does the agency little good, so it is looking for a vendor to help store the assets during investigations and handle disposal, either by returning the digital currency or liquidating it.
The services issued a request for information on FedBizOpps this week asking for industry feedback on methods for storing and converting digital currencies.
“The purpose of this contract is to provide the full range of virtual currency management and disposal services,” the performance work statement reads. “This includes but is not limited to 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.”
The winning contractor will have two primary responsibilities: taking custody of confiscated or forfeited virtual currencies and, when necessary, disposing of those assets.
In the performance work statement, contracting officials said they can’t be sure what kinds or quantities of cryptocurrencies the service might confiscate over the coming years, so the scope of the contract is purposely being left open.
“The contractor shall remain capable of taking custody of all types and quantities of virtual currency without limitation, throughout the performance of this contract,” the document states. “This includes both coin and token types of currency.”
Stored cryptocurrencies must be kept in a segregated digital wallet set aside specifically for the Marshals Service and must be safeguarded against “theft, human error, system failures and acts of God,” the documents state. The contractor must also be able to “brute force,” or be able to hack into, wallets that are “locked by error or technical difficulties,” enabling marshals to gain access no matter what happens.
On the disposal side, the winning vendor must be able to convert the digital currencies to physical money, either by exchanging directly to U.S. dollars, exchanging for more liquid virtual currencies and assets or through a sealed-bid auction. The contractor must also have a mechanism for returning seized assets to the original owners when required.
The Marshals Service will ultimately decide which method to use in each instance, and only after a court order has been issued. Once the written authorization is submitted, the vendor will have five business days to carry out the order. For the rare instances of large seizures, the contractor will have up to 45 calendar days to complete the order.
The exact nature of the contract is still up in the air, with officials currently considering fixed-price, time and materials and indefinite delivery, indefinite quantity contracts. Whatever the strategy, the final contract is expected to have an initial period of performance of one year, with two one-year add-on options.
Contracting officers also expect things to change over time and have included options to modify the contract in the future.
Responses to the RFI are due by 2 p.m. March 19.