The Department of Justice appointed Forensic Risk Alliance as an external monitor for Binance after it pleaded guilty to violating US money laundering regulations and trade sanctions.
According to sources who requested anonymity due to the confidentiality of the matter, Forensic Risk Alliance (FRA) was chosen over Wall Street law firm Sullivan & Cromwell and several other top contenders.
Neither the Justice Department nor spokesmen for Sullivan & Cromwell or the FRA provided immediate comment. the Appointment control This was stipulated in the plea agreement that Binance entered into in November. The world's largest cryptocurrency exchange also agreed to pay $4.3 billion in fines. Binance founder Changpeng Zhao pleaded guilty and agreed to step down as CEO, receiving a four-month prison sentence on April 30.
The FRA will ensure Binance's compliance with the plea agreement, giving the company access to internal records, facilities and employees to report on the company's activities to the government. The FRA, known for its expertise in corruption cases, fraud investigations and compliance, previously served as counsel to Geneva-based commodities trading company Gunvor SA during its $660 million resolution with the Justice Department over foreign bribery charges.
Sullivan & Cromwell was initially the front-runner for the role, but faced setbacks due to its controversial work for Binance competitor FTX. The company's involvement with FTX before its bankruptcy in November 2022 and its subsequent role as a key outside advisor to FTX raised concerns.
Critics, including those who lost money in the FTX collapse, argued that Sullivan and Cromwell failed to detect co-founder Sam Bankman Fried's fraud. However, FTX's new management defended the company against these accusations and praised its recovery efforts.
FTX announced this week that it will fully compensate its clients with interest for any losses incurred in the bankruptcy.
Although not selected as an external monitor, Sullivan & Cromwell is expected to secure a separate five-year monitoring period with Binance on behalf of the Treasury Department's Financial Crimes Enforcement Network.
The role involves identifying and reporting tens of thousands of suspicious activity transactions that the Treasury has accused Binance of ignoring in the past.