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US DOJ Taps Forensic Risk Alliance to Oversee Binance Compliance

US DOJ Taps Forensic Risk Alliance to Oversee Binance Compliance

  • One of the conditions of the arrangement was the appointment of a third-party business.
  • FRA will be able to examine the company’s internal data, facilities, and personnel.

Reports indicate that the US Department of Justice (DOJ) has entrusted the international consultant company Forensic Risk Alliance (FRA) to oversee Binance’s compliance with regulatory mandates for the next three years.

As part of its November 2023 plea bargain, Binance admitted to federal accusations of money laundering and paid a $4.3 billion fine. One of the conditions of the arrangement was the appointment of a third-party business to oversee the exchange’s compliance for the next three years.

Outsourcing Compliance Monitoring 

According to a Bloomberg report from May 10, FRA will be able to examine the company’s internal data, facilities, and personnel in order to notify the DOJ on the company’s operations. The DOJ apparently originally considered appointing Sullivan & Cromwell to the contract, but ultimately decided to go with FRA because of the firm’s history of representing the defunct cryptocurrency exchange FTX.

Creditors of FTX reportedly accused Sullivan & Cromwell of being complicit in the “FTX Group’s multibillion dollar fraud” in February. In a court filing that was part of the class-action case, the creditors alleged that S&C was aware of the theft of monies belonging to Class Members, as well as the omissions, untruthful and fraudulent acts of FTX US and FTX Trading Ltd.

Sullivan & Cromwell is reportedly expected to be chosen for a separate five-year monitoring position for Binance, representing the Financial Crimes Enforcement Network of the Treasury Department, however.

This purported hiring follows the recent imprisonment of Changpeng Zhao, the former CEO of Binance. Zhao received a four-month jail term on April 30 for failing to keep the cryptocurrency exchange’s anti-money-laundering policy functioning.

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