The U.S. Department of Justice (DOJ) has selected the London-based consulting firm Forensic Risk Alliance (FRA) to oversee Binance, the world's largest cryptocurrency exchange, as reported by Bloomberg. This decision follows Binance's admission of guilt to charges of violating U.S. money-laundering regulations and trade sanctions.

Binance reached a plea agreement with the DOJ, which included a hefty fine of $4.3 billion and necessitated the appointment of an independent compliance monitor. As part of the deal, Changpeng "CZ" Zhao, the CEO and co-founder of Binance, consented to resign from his position and was sentenced to four months in prison on April 30.

The choice of FRA was influenced by the DOJ's concerns over Sullivan & Cromwell's involvement with the FTX bankruptcy. The white-shoe law firm was previously favored for the Binance monitorship but faced allegations of failing to identify and possibly participating in fraud at FTX before its collapse. Sullivan & Cromwell has denied these claims, maintaining that their work with FTX was limited and primarily transactional.

As the appointed monitor, FRA will have the responsibility of ensuring Binance adheres to the plea agreement's conditions. This will involve scrutinizing Binance's internal records, facilities, and staff to report on its compliance to the government. FRA has experience in this arena, having previously consulted for Geneva-based commodities trader Gunvor SA during its settlement with the DOJ over foreign bribery charges.

Despite the resistance and controversy surrounding Sullivan & Cromwell, the firm is still anticipated to be assigned a separate five-year monitorship of Binance by the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN). This role will focus on the firm assisting Binance in identifying and reporting "suspicious activities" that were previously overlooked.

CoinDesk Article

Bloomberg Article