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Seized crypto protected with US Marshals Service? Not a lot, new audit reveals

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The Office of the Inspector General (OIG) for the United States Department of Justice carried out an in depth audit of the cryptocurrencies seized by the U.S. Marshals Service (USMS) — revealing the dire want for the federal company to revamp its present crypto administration and coverage techniques.

OIG’s audit on the seized cryptocurrencies discovered the USMS implementing satisfactory safeguards over its storage and entry. However, the company was discovered to be utilizing spreadsheets to take care of observe of the stock owing to the shortcoming of the present system, Consolidated Asset Tracking System (CATS), for every day administration of crypto property.

OIG’s audit disclosed the dearth of documented insurance policies and practices associated to the administration of seized crypto property — particularly associated to the usage of stock spreadsheets— including:

“Current USMS seized cryptocurrency management policies are inadequate, absent, or in some instances provide conflicting guidance related to asset storage, quantification, valuation, and disposal.”

Having the data about USMS’s intent to outsource the administration of seized cryptocurrencies, the Justice division’s OIG laid down seven suggestions to assist enhance the administration of the identical, beginning with implementing a property administration system ”that logs edit historical past to stop fraudulent alteration of the stock information.”

In addition, the OIG really useful establishing recent insurance policies associated to the correct safety and dealing with of the spreadsheets used for monitoring crypto seizures. This contains transferring the info from the spreadsheets into the CATS stock.

Other key suggestions embrace introducing a adequate variety of decimal locations to make sure fractional accuracy and implementing insurance policies catering to blockchain forks and bodily management over property seized by the USMS, “including pertinent USMS wallet keys.”

The report additionally revealed that USMS concurred with all of the seven suggestions and will probably be closed upon proof of its complete implementation.

Related: SEC boss worries crypto invoice undermines monetary protections

CoinShares’ weekly Digital Asset Fund Flows report highlighted the off-loading of digital asset merchandise price $101.5 million amid anticipation of “hawkish monetary policy,” stating:

“What has pushed Bitcoin into a ‘crypto winter’ over the last six months can by and large be explained as a direct result of an increasingly hawkish rhetoric from the US Federal Reserve.”

The report additionally highlighted that the overall property underneath administration for Ether (ETH) funds fell from their peak of $23 billion in November 2021 to $8.7 billion as of June 10, 2022.