According to the latest report, the United States Department of Justice (DOJ) granted three-year oversight of Binance to consultancy Forensic Risk Alliance (FRA). The appointment is part of the plea agreement reached with the Justice Department last year.
In November 2023, Binance entered into a plea agreement with the DOJ regarding money laundering violations, agree to pay $4.3 billion fines and appoint an independent compliance monitor. The company’s co-founder, Changpeng “CZ” Zhao, also agreed to resign as CEO as part of the deal and was recently sentenced to four months in prison.
Here’s why the DOJ chose the FRA over Sullivan and Cromwell
Citing anonymous sources, Bloomberg recently reported that Forensic Risk Alliance received the green light ahead of Wall Street law firm Sullivan & Cromwell to act as independent monitor for Binance Holdings Ltd. A controller is responsible for evaluating a company’s practices to eliminate misconduct and establish an effective ethics and compliance program.
Therefore, if there is truth to the latest revelations, the London-based FRA will likely be able to access Binance’s internal files and documents, while ensuring that the exchange complies with the three-year plea agreement. years.
According to the report, New York-based Sullivan & Cromwell (S&C) was one of the favorites for the monitor role. However, it appears that controversy surrounding the law firm over its work for the now-defunct FTX exchange may have influenced the DOJ’s decision to go with FRA instead.
As Reported Bitcoinist In February, FTX creditors launched a class-action lawsuit against Sullivan & Cromwell, accusing the law firm of being complicit in the stock market’s collapse. FTX’s new management has consistently defended S&C while touting its efforts to turn around the company.
Wednesday, May 8, FTX announcement that its customers would be fully reimbursed for their losses due to the collapse.
Binance to pay $4 million to Canada over compliance issues
Besides the United States, Binance has faced significant pressure from regulators in other countries. Most recently, the world’s largest cryptocurrency exchange has been a fine of 4.4 million dollars (C$6 million) by Canada’s financial regulator, FINTRAC.
FINTRAC has accused Binance of failing to comply with anti-money laundering protections. As reported by Bitcoinist, the company failed to register with the Canadian financial regulator and report large virtual currency transactions.
As Binance’s regulatory issues continue to worsen, the exchange has maintained its commitment to increasing compliance. The recent creation of the company’s very first board of directors of administrators appears to be a step in this direction.
The total cryptocurrency market cap at $2.194 trillion | Source: TOTAL chart on TradingView
Featured image from Unsplash, chart from TradingView
