Wave Digital Assets has asked the Department of Justice Office of the Inspector General to look into how the US Marshals Service handles cryptocurrency assets that have been taken.
The company, which is based in Los Angeles, points to years of documented problems, such as multiple failed attempts to buy things, unaddressed findings from a 2022 OIG audit, and recent public reports that say more than $40 million in government-held digital currency may have been moved from official wallets without permission.
Wave says that these issues show that the USMS's process for buying things, checking out contractors, and keeping an eye on high-value digital assets is seriously broken. The company says that the way things are going right now puts taxpayer-owned cryptocurrency at risk of security problems that don't have to happen and can be avoided.
"These facts are a great example of why Congress put those protections in place. When fiduciary controls aren't followed, fraud isn't just a possibility; it can happen and be stopped.
— Nicole Trudeau, General Counsel for Wave Digital Assets
Wave was involved in the USMS's most recent procurement process, which came after two failed attempts in 2019. The business says it had the best technical scores, offered a lower price, and proposed a custody model that included SEC-registered advisers and businesses that are federally regulated, like BitGo Bank & Trust.
Wave says that even so, the contract went to Command Services & Support (CMDSS), which doesn't have the same licenses, fiduciary standards, or supervisory oversight that are needed to handle sensitive government assets.
Wave has already filed a complaint with the Government Accountability Office (GAO) and is now looking for legal help in the U.S. Court of Federal Claims. A stay has stopped the sale of assets during this time, as required by a related executive order.
Wave's Top Issues
The complaint raises several significant issues, including whether the selected vendor complied with regulatory standards, whether the evaluation process was equitable and consistent, whether conflicts of interest were managed appropriately, and whether the USMS adequately considered the necessity for independent custody, qualified fiduciaries, and real-time monitoring systems.
Wave proposed a multi-layered structure with distinct responsibilities, continuous independent oversight, and security controls that meet institutional standards. The business says that this model meets federal standards for keeping high-risk assets safe.
Issues with FOIA and openness
Wave and consulting firm ECC Solutions have also said that it is hard for the public to get records. They say that sending a FOIA appeal from January 27, 2026, asking for transaction-level data on cryptocurrency dispositions to the wrong place is against the rules and makes things less clear.
Main Claims and Requests
The official complaint makes it clear that the current system doesn't follow the same rules that private businesses have to follow when they handle client money.
Wave wants the OIG to look into how digital assets are bought, how contractors are chosen, how audits are done, and how all of these things are handled in general.
✓ Buying things that didn't work out again and again since 2019
✓ 2022 OIG audit findings that haven't been fixed
✓ Alleged illegal transfer of more than $40 million in assets
✓ Worries about not having enough qualified staff for custody and oversight
✓ Issues with FOIA's openness and access to records
The company wants to make it clear that its push for change is not about making money; it is about keeping government-controlled digital assets safe.
Effects on a larger scale
The situation raises important questions about how federal agencies keep and protect high-value digital property that they seize during criminal and civil enforcement actions. As cryptocurrency becomes more important in investigations of financial crimes, people are worried about the safety and effectiveness of custody practices across the country.
Wave still wants better controls, independent audits, and custody solutions that meet the rules to protect taxpayers' money and restore faith in the system.
We will keep trying to change this process, not for our own benefit, but for the long-term safety of digital assets.— Les Borsai, one of the founders of Wave Digital Assets
The formal request has been sent to the DOJ Office of the Inspector General. It is now part of a case in the U.S. Court of Federal Claims. The outcome might change how the federal government stores cryptocurrencies and picks contractors in the future.
