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Forensic Risk Alliance Appointed to Monitor Binance Compliance After $4.3 Billion Plea Deal

The U.S. Department of Justice (DOJ) has appointed Forensic Risk Alliance (FRA) to monitor cryptocurrency exchange Binance’s compliance with regulatory standards.

This follows Binance’s November 2023 plea deal wherein it admitted to charges of money laundering and other federal offenses, resulting in a $4.3 billion fine.

FRA’s three-year engagement will involve scrutinizing Binance‘s internal records, premises, and employee interactions to keep the DOJ informed of its compliance status, a Bloomberg report revealed on May 10.

Originally, the law firm Sullivan & Cromwell was considered for the monitoring contract due to their prominence in the sector.

However, their previous association with FTX, another crypto exchange that went bankrupt, influenced the DOJ’s decision to opt for FRA instead.

This decision came amid allegations against Sullivan & Cromwell for their involvement in FTX Group’s fraudulent activities, as reported by Cointelegraph on February 17.

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The firm allegedly had prior knowledge of deceitful practices at FTX that led to the loss of client funds, as stated by FTX creditors in a class-action lawsuit.

Despite these controversies, Sullivan & Cromwell is expected to secure a separate five-year monitoring contract for Binance under the auspices of the Treasury Department’s Financial Crimes Enforcement Network.

In related news, Binance’s former CEO, Changpeng “CZ” Zhao, was sentenced to four months in prison on April 30.

The sentence was for failing to implement an effective Anti-Money Laundering program at the exchange.

Although prosecutors sought a three-year term, the judge mitigated the sentence, citing a lack of evidence that Zhao was directly aware of specific illicit activities within Binance.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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