Binance to be under FRA surveillance in the next 3 years: Report
The US Department of Justice (DOJ) has 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 sources familiar with the matter.
Appointing a third-party organization to monitor the exchange's compliance over the next three years was a key requirement of Binance's plea agreement in November 2023, in which it pleaded guilty to money laundering and other federal charges, along with a $4.3 billion fine.
According to a May 10 Bloomberg report, the FRA will provide internal records, premises and personnel to the DOJ to provide up-to-date information on the company's activities.
Law firm Sullivan & Cromwell reportedly originally held the contract, but the firm's prior work for rival crypto exchange FTX led to the DOJ appointing FRA instead.
In the year On February 17, Cointelegraph reported that FTX creditors had sued Sullivan & Cromwell for “actively participating in the FTX Group's multi-billion dollar fraud”.
“S&C about FTX US and FTX Trading Ltd. They knew of the omissions, untruths and fraudulent practices, and misappropriation of class members' funds,” the creditors said in a class-action lawsuit.
We asked @TheJusticeDept and Judge Kaplan to hold accomplices accountable in the SBF sentencing.
Sullivan and Cromwell were the leaders in pursuing Binance.
The DOJ has now chosen the Forensic Risk Alliance to oversee Binance
Impact to every FTX customer to all victims… pic.twitter.com/DuDjaAr8F3
— Sunil (@sunil_trades) May 10, 2024
However, it is expected that Sullivan and Cromwell will be selected for a separate five-year oversight role for Binance on behalf of the Treasury's Financial Crimes Enforcement Network.
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The reported appointment comes weeks after the arrest of Binance's former CEO, Changpeng “CZ” Zhao.
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 the prosecutors initially asked for a three-year prison sentence, the judge decided on a shorter sentence, saying that there was no evidence that Zhao was directly informed about certain illegal activities in Binance.
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