The United States Department of Justice (DOJ) appointed Forensic Risk Alliance (FRA) to serve as the outside monitor over the crypto exchange Binance, reports Bloomberg citing people familiar with the matter.
FRA, a London-based providing services in forensic accounting and compliance consulting services, beat out Sullivan & Cromwell to take on the position, Bloomberg adds. Binance must undergo a monitorship of three years as part of its plea deal with the DOJ related to money laundering violations.
A monitorship involves a third party ensuring legal compliance for its appointee in an effort to bolster transparency and regulatory adherence. Analysts have previously commented that Binance's monitorship will be "hard" on the firm, taking up much of its internal resources, but might allow Binance to re-enter the markets it had been dropped from, The Block previously reported.
Sullivan & Cromwell, headquartered in New York City, offers clients services in bank regulation, digital assets, economic sanctions and financial crimes. In February 2024, the firm received a class action lawsuit from FTX creditors, who alleged that the firm was too close to the exchange before its collapse.
In November 2023, the DOJ fined Binance $4 billion in a plea deal that could end its investigations into the firm and allow the exchange to continue operating.
Changpeng 'CZ' Zhao had to step down as CEO and pay a $50 million. He also pled guilty to violating the Bank Secrecy Act and conducting an unlicensed money-transmitting business and faces a four-month jail sentence.
On May 9, the Canadian financial regulator Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) fined Binance around $6 million CAD ($4.4 million USD) for two alleged violations of money laundering rules.
The Block requested comment from FRA and Sullivan & Cromwell.
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