Forensic Risk Alliance, an international consulting group, is apparently going to closely monitor Binance’s compliance efforts for the next three years. Forensic Risk Alliance (FRA), an international consulting firm, has apparently been hired by the US Department of Justice (DOJ) to make sure cryptocurrency exchange Binance complies with regulatory standards for the next three years, according to persons familiar with the situation.
Binance’s November 2023 plea deal, in which it admitted guilt to money laundering and other federal offences and agreed to pay a $4.3 billion fine, included a crucial stipulation for the appointment of a third-party company to oversee the exchange’s compliance over the next three years.
Bloomberg said on May 10 that FRA will be able to send the DOJ updates on the company’s operations by accessing internal records, the company’s facilities, and its personnel. The contract was apparently initially under consideration for the law firm Sullivan & Cromwell, but the DOJ ultimately chose to use FRA due to the firm’s previous work with competitor cryptocurrency exchange FTX before to its bankruptcy.
As reported on February 17, Sullivan & Cromwell was accused by FTX creditors of actively taking part in the “multibillion dollar fraud” committed by the FTX Group. In a court document included in the class-action case, the creditors claimed that “S&C knew of FTX US and FTX Trading Ltd.’s omissions, untruthful and fraudulent conduct, and misappropriation of Class Members’ funds.”
It is anticipated, meanwhile, that Sullivan & Cromwell will be chosen for a different five-year monitoring position for Binance, serving as the Financial Crimes Enforcement Network representative for the Treasury Department. Only a few weeks have passed since Changpeng “CZ” Zhao, the former CEO of Binance, was arrested.
Zhao was given a four-month prison sentence on April 30 for not keeping the cryptocurrency exchange’s anti-money laundering programme up to date. The judge reduced Zhao’s sentence despite the prosecution’s initial request for a three-year prison term, reasoning that Zhao was not directly notified of any particular unlawful activity at Binance.