Binance to be monitored by FRA for next 3 years: Report
The U.S. Department of Justice (DOJ) has reportedly appointed international consulting firm Forensic Risk Alliance (FRA) to ensure that cryptocurrency exchange Binance complies with regulatory requirements over the next three years, according to people familiar with the matter.
The appointment of a third-party law firm to monitor the exchange’s compliance with regulations over the next three years follows Binance’s November 2023 plea agreement, in which it pleaded guilty to money laundering and other federal charges and was fined $4.3 billion. It was a key requirement of the deal.
According to a May 10 Bloomberg report, FRA will have access to internal records, buildings and employees to provide the government with up-to-date information on the company’s activities.
The contract is said to be very lucrative, providing a “steady flow of billable hours.”
Law firm Sullivan and Cromwell was initially reported to have been first in line for the deal, but the company’s prior work on rival cryptocurrency exchange FTX before its bankruptcy led the DOJ to appoint FRA instead.
On February 17, Cointelegraph reported that FTX creditors alleged that Sullivan and Cromwell were actively involved in “the multi-billion dollar fraud of FTX Group.”
“S&C was aware of the omissions, false and fraudulent conduct of FTX US and FTX Trading Ltd., and the misappropriation of funds by class members,” the creditors said in court filings as part of the class action lawsuit.
we asked @TheJusticeDept Judge Kaplan held the co-conspirators accountable in sentencing SBF.
Sullivan and Cromwell have taken the lead in monitoring Binance.
The DOJ has now selected Forensic Risk Alliance to monitor Binance.
To all affected victims, thank you to all FTX customers… pic.twitter.com/DuDjaAr8F3
— Sunil (FTX Creditor Champion) (@sunil_trades) May 10, 2024
However, Sullivan & Cromwell is reportedly expected to be selected for a separate five-year monitoring role at Binance, representing the Treasury Department’s Financial Crimes Enforcement Network.
Related: Binance Receives FIU Approval for Return to India
The appointment comes just weeks after Binance’s 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 cryptocurrency exchange.
Prosecutors initially sought three years in prison, but Judge Jones sentenced Zhao to a shorter sentence, arguing there was no evidence that Zhao had been directly notified of specific illegal activities by Binance.
magazine: Binance counters ‘$50 billion worth’ acquisition of WSJ and Hong Kong cryptocurrency ETF: Asia Express
