Binance to Face FRA Monitoring for Next 3 Years

Forensic Risk Alliance to oversee Binance's compliance for 3 years under DOJ supervision. FRA granted access to internal records and employees for monitoring.

May 11, 2024 - 13:15
May 11, 2024 - 13:14
Binance to Face FRA Monitoring for Next 3 Years
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Forensic Risk Alliance, an international consultancy firm, will reportedly oversee all compliance activities of cryptocurrency exchange Binance for the next three years, as per sources familiar with the matter.

According to reports, the United States Department of Justice (DOJ) has appointed Forensic Risk Alliance (FRA) to ensure Binance complies with regulatory requirements over the next three years. This appointment is part of Binance's plea deal in November 2023, where it pleaded guilty to money laundering and other federal charges and received a $4.3 billion fine. FRA will have access to internal records, premises, and employees to provide the DOJ with updates on Binance's activities, Bloomberg reported on May 10.

Initially, law firm Sullivan & Cromwell was in line for the contract. However, due to its prior work for rival crypto exchange FTX and allegations of involvement in FTX's fraudulent activities, the DOJ chose FRA instead. There are expectations that Sullivan & Cromwell may still be selected for a separate monitoring role for Binance, representing the Treasury Department's Financial Crimes Enforcement Network.

These developments come shortly after Binance's former CEO Changpeng “CZ” Zhao was sentenced to four months in prison for failing to maintain an effective Anti-Money Laundering program at the crypto exchange. Although prosecutors sought a three-year prison term, the judge opted for a shorter sentence, citing a lack of evidence that Zhao was directly informed of specific illegal activities at Binance.