Author: Ciaran Lyons, CoinTelegraph; Translated by: Deng Tong, Golden Finance
The U.S. Department of Justice (DOJ) has appointed international consultancy Forensic Risk Alliance (FRA) to ensure cryptocurrency exchange Binance complies with regulatory requirements over the next three years, according to people familiar with the matter.
Designating a third-party firm to monitor the exchange’s compliance for the next three years was a key requirement of Binance’s November 2023 plea agreement, which saw it admit to money laundering and other federal charges and pay a $4.3 billion fine.
The FRA will have access to internal records, offices and employees in order to provide the Justice Department with updates on the company’s activities, Bloomberg reported May 10.
Reportedly, law firm Sullivan and Cromwell was initially the most qualified to receive the designation, but the firm’s work for rival cryptocurrency exchange FTX prior to its bankruptcy led the DOJ to appoint FRA instead.
On February 17, it was reported that FTX creditors claimed that Sullivan & Cromwell was actively involved in the "multi-billion dollar fraud of the FTX Group."
“S&C knew of FTX US and FTX Trading Ltd.’s negligent, false and fraudulent conduct, and misappropriation of class members’ funds,” the creditors said in court documents as part of the class action lawsuit.
However, Sullivan & Cromwell is reportedly expected to be selected for a separate five-year surveillance role for Binance, on behalf of the Treasury Department’s Financial Crimes Enforcement Network.
The appointment reportedly comes weeks after former Binance CEO Changpeng Zhao was sentenced to prison.
On April 30, Zhao Changpeng was sentenced to four months in prison for failing to comply with an effective anti-money laundering program at his cryptocurrency exchange.
Although prosecutors initially sought three years in prison, Judge Jones decided to shorten the sentence, claiming that there was no evidence that Zhao Changpeng had direct knowledge of Binance's specific illegal activities.
