Binance Faces 3-Year FRA Oversight: Latest Report Reveals

According to sources familiar with the situation, the United States Department of Justice (DOJ) has reportedly enlisted the international consultancy firm Forensic Risk Alliance (FRA) to ensure that cryptocurrency exchange Binance complies with regulatory requirements over the next three years.

A key requirement of Binance’s plea deal in Nov 2023, in which it pleaded guilty to money laundering and other federal charges and agreed to a $4.3 billion fine, was appointing a third-party firm to oversee compliance for the next three years.

According to a May 10 Bloomberg report, FRA will have access to internal records, premises, and employees to provide the DOJ with updates on the activities.

Initially, law firm Sullivan and Cromwell were reportedly in line for the contract. Still, due to the firfirm’sevious work for rival crypto exchange FTX before its bankruptcy, the DOJ chose to appoint FRA instead.

On Feb 17, it was reported that FTX creditors accused Sullivan & Cromwell of actively participating in the “FTX Group’s multibillion-dollar fraud.

Binance Oversight By Sullivan and Cromwell

Moreover, In a court filing of the class-action lawsuit, the creditors stated that S&C knew of FTX US and FTX Trading Ltd.’s omissions, untruthful and fraudulent conduct, and misappropriation of Class Members’ funds.

It’s said that Sullivan and Cromwell might be picked for a five-year job monitoring Binance separately. They’ll represent the Treasury Department’s Financial Crimes Enforcement Network.

However, the reported appointment follows closely after Binance’s former CEO Changpeng “CZ” Zhao got sentenced to prison just weeks ago.

On April 30, Zhao got four months in jail for not keeping a good Anti-Money Laundering plan at the crypto exchange.

Even though prosecutors wanted three years in jail, Judge Jones chose a shorter sentence. He said there was no proof Zhao knew about any illegal stuff happening at Binance.

Related Reading | Cardano Founder’s Warning: Crypto Politics Against Presidential Vote

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