GAO Denies Protest by Wave Digital Assets Regarding DOJ Cryptocurrency Management Contract Award
On March 14, 2025, the U.S. Government Accountability Office (GAO) denied a protest filed by Wave Digital Assets, LLC concerning a contract awarded by the Department of Justice’s (DOJ) U.S. Marshals Service (USMS) to Command Services & Support, Inc. (CMDSS). The contract involves assistance in managing and disposing of seized cryptocurrency assets, specifically Class 2-4 cryptocurrencies that require sophisticated software and hardware wallet solutions.
Wave Digital Assets protested the award, asserting that the DOJ improperly evaluated proposals and failed to adhere strictly to the solicitation's stated criteria. Specifically, Wave argued that CMDSS, and another offeror, should have been disqualified for allegedly not demonstrating possession of necessary federal and state cryptocurrency licenses. Wave contended these licenses were required according to the solicitation’s mandate that contractors comply with all applicable laws and regulations.
The GAO decision rejected Wave’s arguments, emphasizing that the solicitation’s provisions related to obtaining necessary licenses and permits and adhering to applicable laws were matters of contract administration, not proposal evaluation criteria. The GAO clarified that such compliance requirements apply during contract performance and not during the proposal assessment phase. Furthermore, the GAO noted the solicitation did not specify particular licenses or laws, such as the Securities Exchange Act or Investment Advisers Act, for proposal evaluation purposes.
The GAO also addressed Wave’s contention that the agency inadequately evaluated how the offerors’ systems would ensure compliance with cryptocurrency regulations. Despite Wave’s proposal receiving a high-confidence rating for its detailed approach, the GAO found it reasonable that the DOJ rated CMDSS’s and the third offeror’s proposals as "some confidence," as both proposals adequately addressed regulatory compliance at a conceptual level.
The decision highlighted the DOJ's substantial discretion in evaluating proposals and concluded that the agency’s evaluation process was fair and consistent with the solicitation’s terms. Additionally, the GAO dismissed Wave's supplementary claim alleging unequal treatment compared to another unsuccessful offeror, as no prejudice was demonstrated.
Disclaimer: This summary does not guarantee complete accuracy and does not constitute legal advice. Readers should consult the full GAO decision or legal counsel for specific guidance.
