Coinbase Prime Chosen by US Marshals Service for 325M Custody Services Contract

Coinbase Prime Secures $32.5M Contract for Custody Services with U.S. Marshals Service


Ruholamin Haqshanas
Last updated:
July 2, 2024, 03:00 EDT
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2 min read


Coinbase Prime, the brokerage platform of leading cryptocurrency exchange Coinbase, has been chosen by the U.S. Marshals Service (USMS) to provide custody and trading services for its large-cap cryptocurrency holdings. Coinbase announced the partnership in a blog post on Monday, stating that the USMS selected Coinbase Prime due to its exceptional track record and ability to deliver institutional-grade crypto services. Under the terms of the contract, the USMS will pay a significant sum of $32.5 million. Coinbase Prime will be responsible for managing and disposing of the USMS’s substantial cryptocurrency holdings. This collaboration further solidifies Coinbase Prime’s reputation as a reliable custodian, as it currently safeguards over $330 billion in assets. Since its launch three years ago, Coinbase Prime has become the preferred platform for institutions and significant digital asset holders. It has also established itself as a primary partner for various spot cryptocurrency exchange-traded funds (ETFs). In the first quarter of 2024 alone, Coinbase recorded an institutional trading volume of $256 billion. The blog post also highlighted Coinbase’s longstanding commitment to supporting law enforcement agencies, which dates back to the establishment of its law enforcement program in 2014. The selection of Coinbase for custody services coincides with the US government’s recent sale of 3,940 Bitcoin, worth approximately $240 million, seized from a narcotics trafficker in 2014. The US government has become one of the largest holders of Bitcoin, acquiring around 200,000 coins, worth about $5 billion, through seizures related to criminal activities. While Coinbase celebrates this partnership, it has not been without its regulatory challenges. In April, Judge Katherine Polk Failla of the US District Court of the Southern District of New York ruled that the Securities and Exchange Commission’s (SEC) lawsuit against Coinbase could proceed. Coinbase had filed a motion to dismiss the SEC case, which alleges that the exchange operates as an unregistered securities exchange, broker, and clearing agency. More recently, Coinbase has accused the SEC and the Federal Deposit Insurance Corporation (FDIC) of improperly blocking its document requests. The exchange claims that the regulators are obstructing access to documents that should be available under the Freedom of Information Act (FOIA). Despite these hurdles, Bank of America (BAC) has upgraded its rating on Coinbase shares from underperform to neutral, raising its price target for Coinbase to $217 from $110. Investment banking firm KBW has also increased its Coinbase price target, raising it from $160 to $230 while maintaining its market performance rating.