The United States Department of Justice’s Office of Inspector General (OIG) conducted a comprehensive audit of cryptocurrencies seized by the US Marshals Service (USMS), revealing the need imperative that the federal agency revamp its existing cryptocurrency policy and management systems. .
The OIG audit of seized cryptocurrencies found that the USMS implemented adequate security measures regarding its storage and access. However, the agency was found to be using spreadsheets to track inventory due to the inability of the existing system, the Consolidated Asset Tracking System (CATS), for daily management of crypto assets.
As of June 2021, the USMS handled nearly 200 cryptocurrency seizures from the Department of Justice. We examined the handling of seized cryptocurrency by the USMS and found that the USMS faced challenges in managing and tracking cryptocurrency.
— DOJ Inspector General (@JusticeOIG) June 14, 2022
The OIG audit revealed a lack of documented policies and practices related to the management of seized crypto assets, especially regarding the use of inventory spreadsheets, adding:
“Current USMS seized cryptocurrency management policies are inadequate, non-existent, or in some cases provide conflicting guidance related to asset storage, quantification, valuation, and disposal.”
Upon learning of the USMS’ intention to outsource the management of seized cryptocurrencies, the Department of Justice’s OIG established seven recommendations to help improve the management of cryptocurrencies, beginning with the implementation of a property management system “that records edit history to prevent fraudulent alteration of inventory records.”
Additionally, the OIG recommended establishing new policies related to the proper security and handling of spreadsheets used to track cryptocurrency seizures. This includes moving data from spreadsheets to CATS inventory.
Other key recommendations include introducing a sufficient number of decimal places to ensure fractional precision and implementing policies that cater to blockchain forks and physical control over assets seized by the USMS, “including relevant USMS wallet keys.” “.
The report also revealed that the USMS agreed with all seven recommendations and will close on evidence of their full implementation.
Related: SEC Chief Concerns Crypto Bill Will Undermine Financial Protections
CoinShares’ weekly digital asset cash flow report highlighted $101.5 million worth of digital asset product offloading amid anticipation of “aggressive monetary policy,” stating:
“What has thrown Bitcoin into a ‘crypto winter’ over the past six months can largely be explained as a direct result of increasingly aggressive rhetoric from the US Federal Reserve.”
The report also highlighted that the total assets under management of Ether (ETH) funds fell from its high of $23 billion in November 2021 to $8.7 billion as of June 10, 2022.