US Department of Justice has ordered that outside monitors be given access to documents about Binance’s activities
The condition is part of the exchange’s agreement with authorities to plead guilty to regulatory violations
13.05.2024 - 08:32
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What’s new? The US Department of Justice has selected consulting firm Forensic Risk Alliance (FRA) as an external monitor of the global crypto exchange Binance. As part of Binance’s plea deal with the US authorities to violate sanctions and AML regulations, FRA is presented with the authority to monitor the exchange’s internal records for three years to report on its activities.
What else is known? Last November, Binance pleaded guilty to violating the law and agreed to pay fines totaling $4,3 billion. Changpeng Zhao, the founder of the exchange, resigned as CEO as part of the settlement of claims, also pleaded guilty and paid the fines. On April 30, he was sentenced to four months in prison.
The Justice Department-appointed FRA will be responsible for enforcing Binance’s plea agreement. The exchange must give the FRA access to corporate equipment and records of operations and employees.
FRA specializes in corruption and fraud investigations. It previously served as counsel to Geneva-based commodities trading company Gunvor SA in its negotiations with the US Justice Department to recover $660 million in connection with foreign bribery allegations.
A three-year appointment at Binance means a steady stream of billable hours, so many lawyers and consultants vied for the curatorial position. One contender, according to Bloomberg sources, was Sullivan & Cromwell, which many banks and senior Wall Street executives work with. Sullivan & Cromwell was ultimately rejected because the firm also serves Binance’s former competitor, the bankrupt crypto exchange FTX.
FTX will return 118% of claims to creditors at prices at the time of the exchange’s collapse
The plan must get court approval to be executed
However, Sullivan & Cromwell is expected to be brought in for a five-year monitoring of Binance by the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).
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