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Friday, June 14, 2024

U.S. Marshals Service (USMS) looks at forming an agent for managing confiscated cryptocurrency


As per the latest announcement made on a public document which was released during the last week, the U.S. Marshals Service (USMS), the United States based federal law enforcement agency, is planning to form an appropriate authority that would be responsible for managing the confiscated cryptocurrency.

Recently, The USMS has issued two draft documents, one being the Request for Information (RFI) pertaining to the legal procedures of the management and the other being the disposal of forfeited crypto assets. The imposition of RFI would be able to enhance USMS’s current custodial operations by keeping an absolute and efficient accounting record of the USMS’ virtual currency inventory.

The document read “The Government reserves the right to use the information submitted in response to this RFI at its sole discretion and is under no obligation to acknowledge receipt or provide feedback with regard to any submission. Proprietary, classified, confidential, or sensitive information should be excluded from your response as all submissions become Government property immediately upon submission and will not be returned. This RFI is being issued solely for information and planning purposes and does NOT constitute a Request for Proposal (RFP) or a promise to issue an RFP in the future; nor shall it be construed as a commitment by the Government to procure any services, or an authorization to incur any costs for which reimbursement would be required or sought. “

The United States Marshals Service (USMS) is one of the most important element of the Department’s Asset Forfeiture Program (AFP) operating within the U.S. Department of Justice (DoJ) whose primary objective is to allocate an agent or a contractor who would be responsible to manage and dispose of the seized or forfeited virtual currency. The AFP works towards utilizing assets forfeiture authority to improve public safety along with their security.

The mission is achieved through the breakdown of planned crime and withdrawing all the financial motivation available for the criminals for executing the unlawful act by way of seizure and forfeiture of assets that were gained or were used to execute the federal crime. The assets include real estate, commercial businesses, cash, financial instruments, vehicles, jewelry, art, antiques, collectibles, vessels and aircraft.

Performance Work Statement (PWS) – the first document in which the USMS has covered the exhaustive details of the entire series related to management and disposal services of forfeited virtual currency. The document also states the obligations and the general procedures to be followed by the contractor.

The objectives of the PWS document reads “As the departmental custodians of all seized or forfeited assets, the USMS has a duty to ensure that the services of this contract provide maximum quality while minimizing the expense to the USMS. As such, the USMS expects the Contractor, as its agent, to take prudent action in good faith on the USMS’s behalf with the same duty of care while augmenting our capacity and efficiency with regard to the management and disposal of virtual currency.

The USMS expects to improve its current custodial operations through this contract in several ways. Primary among these is to ensure the security and accuracy of all virtual currency transactions. To that end, the Contractor shall ensure that a complete and accurate accounting of USMS virtual currency inventory is maintained and available at all times from the point the Contractor is given custody through disposal. In addition, the Contractor shall comply with the provisions of the PWS in the most cost effective manner possible, without sacrificing quality, while adhering to recognized business standards in the industry. The USMS feels that meeting these expectations will dramatically increase our ability to meet our customers’ needs and auditors’ requirements. “

As per the document, the contractor should ensure the correctness of information and safety of all the virtual currency transactions including the virtual currencies directly converted into U.S. dollars, the exchange to a more liquid form of virtual currency, return to the owner and others.

Talking on the requirements of the contractors, the draft documents states “It is impossible to determine which of the assets under investigation will be taken into USMS custody and ultimately referred to the contractor. However, in order to realize the increased capacity and efficiencies expected from this contract, the Contractor shall remain capable of taking custody of all types and quantities of virtual currency without limitation, throughout the performance of this contract. This includes both coin and token types of currency.”

The PWS contract has deployed various activities to encourage the safety and accuracy of the virtual currency transactions such as accounting, customer management, audit compliance, managing blockchain forks, wallet creation, the transformation of token assets into coin assets and any other essential processes which would be able to complete their objective efficiently.

In the second document – The Quality Assurance Surveillance Plan (QASP), the USMS introduces a valuation process through which a contractor’s performance would be measured.

Stating the objective of the documents, the drafts says “This Quality Assurance Surveillance Plan (QASP) is pursuant to the requirements listed in the performance-based Performance Work Statement (PWS) for Management and Disposal of Virtual Currency. This performance-based plan sets forth the procedures and guidelines the United States Marshals Service (USMS) will use in evaluating the performance of the Contractor and will notify the contractor of each instance of unsatisfactory performance. In the event the contractor’s performance is found to be unsatisfactory, the contractor will be responsible for making required changes to ensure performance is brought up to the satisfactory level.

Additionally, this QASP is based on the premise that the contractor, not the USMS, is responsible for quality assurance while performing under the terms of this contract. The Contracting Officer’s Representative (COR) is responsible for performance measurement and effective evaluation of the contractor’s compliance”

The document lists down principal authorities that includes Contracting Officer and Contracting Officer’s Representative who would be responsible for the assessment of the performance and effective evaluation of the contractor’s compliance.

Explaining the methods of quality assurance surveillance, the document states “There are several surveillance methods that can be used to evaluate and monitor contractor performance: Management Information Systems, Planned Sampling Inspection, 100% Inspection, Periodic Sampling Inspections, Customer Complaints, Unscheduled Inspections, Direct Observation, and Random Sampling Inspections.
The USMS reserves the right to use any of the above-defined surveillance inspection methods as it deems appropriate.
Regardless of the surveillance method, the COR will inform the contractor when a defect is identified and inform the manager of the specifics of the problem. The COR, with assistance from the CO, if needed, is responsible for monitoring the contractor’s performance in meeting a specific performance standard/AQL.”

The document also describes the process for recording the performance and states “A “Satisfactory” (SAT), “Marginal” (MAR), or “Unsatisfactory” (UNSAT) rating will be assigned to each task inspected, based on the Performance Criteria per the PWS. The work requirement tasks reasonably unavailable for inspection will be rated “Not Measured” (NM). A brief description of observed defects or actions taken will be explained on the Inspection Report.
Documented Defects: Copies of documented performance defects will be provided to the Contractor within 24 hours and validated by the COR. Performance defects represent a loss in value to the USMS and are subject to payment deductions.
At the end of the month, the COR will summarize the results of the inspections; compare the number of satisfactory performance ratings to the AQL for each work requirement and review documented defects, determine if monitoring needs to be increased, and, calculate recommended payment deductions for documented defects in accordance with the “Payment Adjustment Clause” in Section E.”

Although the USMS has issued guidelines of RFI which is just for the effective information and planning purposes, such a process doesn’t promise to issue a Request for Proposal (RFP) in near future

In the previous year, the USMS had declared a bid auction that involved 660 confiscated Bitcoins (BTC) and the interested participants were required to deposit around $200,000 to become a part of this auction.

Glen Nelson

Glenn Nelson has been actively engaged in stocks, digital currencies and global financial markets. He has recently joined EdgeCoinNews team as a writer. He has studied journalism and have five years of experience in writing news stories in different domains such as cryptocurrencies, price analysis, opinion articles etc. In his free time, you can find him exploring tools for financial analysis.

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