US DOJ Engages Forensic Risk Alliance for 3-Year Binance Compliance Monitoring Post Fine and CEO Sentencing
Summary:
The US Department of Justice (DOJ) has engaged international consulting agency Forensic Risk Alliance (FRA) to oversee regulatory compliance of cryptocurrency exchange, Binance, for the next three years. This follows Binance's plea deal in 2023, where it admitted to federal charges including money laundering, resulting in a $4.3 billion fine. The decision to appoint FRA comes just weeks after the sentencing of Binance's former CEO, Changpeng "CZ" Zhao, to a four-month prison term for failing to maintain an effective Anti-Money Laundering program.
In an attempt to ensure regulatory compliance of cryptocurrency exchange Binance, the United States Department of Justice (DOJ) has reportedly engaged Forensic Risk Alliance (FRA), an international consulting firm. This decision follows the plea bargain of Binance in November 2023, wherein it admitted to accusations of money laundering among other federal offenses, resulting in a massive $4.3 billion penalty. A crucial part of the deal centered around the selection of an independent law entity to supervise Binance's compliance for the next three years.
As per a Bloomberg report issued on May 10, FRA will have the authority to access the organization's internal data, establishments, and staff to furnish the government with periodic reports regarding their operations. This task is deemed to be rather profitable, promising persistent billing opportunities.
Legal entity Sullivan and Cromwell were originally the favorites for the assignment, however, their prior involvement with rival crypto platform FTX before its insolvency caused the authorities to reconsider. Earlier, on February 17, Cointelegraph had reported allegations raised by FTX creditors against Sullivan & Cromwell, accusing them of active participation in the multiple billion dollar deceit committed by FTX Group.
There are speculations that despite this setback, Sullivan & Cromwell might still be considered for a distinct five-year governance role representing the Financial Crimes Enforcement Network of the Treasury Department for Binance.
This latest development follows closely on the heels of the sentencing of Changpeng "CZ" Zhao, the previous CEO of Binance, to a four-month prison term on April 30th. Zhao had been found guilty of failing to uphold an effective Anti-Money Laundering scheme at the crypto exchange. Even though the prosecution initially demanded a three-year prison term, Judge Jones decreed a shorter sentence, citing lack of direct evidence linking Zhao to specific illegal activities within Binance.
Published At
5/11/2024 9:06:22 AM
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