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.
Appointing a third-party firm to monitor the exchange’s compliance over the next three years was a key requirement of Binance’s plea deal in November 2023, where it pleaded guilty to money laundering and other federal charges, along with receiving a $4.3 billion fine.
FRA will have access to internal records, premises, and employees to provide the DOJ with updates on the company’s activities, according to a May 10 Bloomberg report.
Law firm Sullivan & Cromwell was reportedly initially first in line for the contract, but the firm's prior work for rival crypto exchange FTX before its bankruptcy led the DOJ to appoint FRA instead.
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
— Sunil (FTX Creditor Champion) (@sunil_trades) May 10, 2024
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
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 reported appointment comes only weeks after Binance’s former CEO Changpeng “CZ” Zhao was imprisioned.
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, the judge 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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