Binance under FRA's surveillance for next 3 years: Report
The United States Department of Justice (DOJ) has reportedly appointed international consultancy firm Forensic Risk Alliance (FRA) to ensure cryptocurrency exchange Binance complies with regulatory requirements over the next three years, according to sources familiar with the matter.
As part of Binance’s plea deal in November 2023, where it pleaded guilty to money laundering and other federal charges, along with a $4.3 billion fine, appointing a third-party law firm to monitor the exchange’s compliance over the next three-years was a key requirement.
FRA will have access to internal records, premises, and employees to provide the government with updates on the company’s activities, according to a May 10 Bloomberg report.
The contract is said to be highly lucrative, offering a “steady stream of billable hours.”
Law firm Sullivan and Cromwell were reportedly initially first in line for the contract, but the firm’s prior work for rival cryp exchange FTX before its bankruptcy led the government to choose a different direction.
On Feb 17, Cointelegraph reported that FTX creditors alleged that Sullivan & Cromwell, actively participated in the “FTX Group’s multibillion dollar fraud.”
“S&C knew of FTX US and FTX Trading Ltd.’s omissions, untruthful and fraudulent conduct, and misappropriation of Class Members’ funds,” the creditors stated in a court filing as part of the class-action lawsuit.
We asked @TheJusticeDept and Judge Kaplan to hold co-conspirators accountable at SBF’s sentencing
Sullivan and Cromwell were the lead to monitor Binance
DOJ has now picked Forensic Risk Alliance to monitor Binance
Well done to every FTX customer for all the victim impact… pic.twitter.com/DuDjaAr8F3
— Sunil (FTX Creditor Champion) (@sunil_trades) May 10, 2024
However, there’s reportedly an expectation that Sullivan & Cromwell will be selected for a separate five-year monitoring role for Binance, representing the Treasury Department’s Financial Crimes Enforcement Network.
Related: Binance obtains FIU approval for India return
The appointment comes only weeks after Binance former CEO Changpeng „CZ“ Zhao was sentenced to prison.
On April 30, Zhao was sentenced to four months in prison for failing to maintain an effective Anti-Money Laundering program at the crypto exchange.
Although prosecutors initially sought a three-year prison term, Judge Jones decided on a shorter sentence, claiming that there was no evidence Zhao was directly informed of specific illegal activities at Binance.
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