The U.S. Marshals Service has signed a $32.5 million deal with Coinbase Prime to provide custody services

The United States Marshals Service (USMS), a division of the Department of Justice that is responsible for asset forfeiture, has formed a partnership with Coinbase Prime, the brokerage platform of the world’s largest cryptocurrency exchange.

Coinbase stated in a blog post on Monday that the collaboration is intended to offer custody and trading services for the USMS’s large-cap cryptocurrency holdings.

According to the announcement, the USMS selected Coinbase Prime for its institutional-grade crypto services and demonstrated track record.

The USMS is required to pay a substantial sum of $32.5 million in accordance with the terms of the contract.

Coinbase Prime will be responsible for the management and disposal of substantial quantities of popular cryptocurrencies held by the USMS as a component of the agreement.

As of this year, Coinbase Prime has safeguarded over $330 billion in assets, which further solidifies its reputation as a trusted custodian.

Since its inception nearly three years ago, Coinbase Prime, a commercially available service, has become the preferred platform for institutions and significant digital asset holders.

It has become a primary associate for a variety of spot cryptocurrency exchange-traded funds (ETFs). Coinbase recorded an institutional trading volume of $256 billion in the first quarter of 2024.

Coinbase noted in the blog post that it has maintained a steadfast dedication to assisting law enforcement agencies since the inception of its law enforcement program in 2014.

In the past week, the United States government has sold 3,940 Bitcoin (approximately $240 million) that it seized from a narcotics trafficker in 2014. Coinbase has been chosen to provide custodial services.

The United States government has acquired approximately 200,000 Bitcoin coins (equivalent to approximately $5 billion) through seizures associated with illicit activities, thereby becoming one of the largest holders of the cryptocurrency.

In the interim, Coinbase has encountered its fair share of regulatory challenges. Judge Katherine Polk Failla of the US District Court of the Southern District of New York ruled in April that the SEC’s lawsuit against Coinbase could continue.

After Coinbase submitted a motion to dismiss the SEC case, which relates to allegations that the exchange functions as an unregistered securities exchange, broker, and clearing agency, the Judge rendered a decision.

Coinbase has recently accused the SEC and the Federal Deposit Insurance Corporation (FDIC) of unjustly obstructing its document requests.

According to the exchange, regulators are obstructing access to documents that are purportedly accessible under the Freedom of Information Act (FOIA).

In the interim, Bank of America (BAC) has recently raised its price target for Coinbase from $110 to $217, and has upgraded its rating on Coinbase shares from underperform to neutral.

Investment banking firm KBW has also raised its price target for Coinbase, in addition to Bank of America. KBW maintained its market performance assessment while increasing its price target for Coinbase from $160 to $230 in a research analysis.

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