DOJ Taps Forensic Risk Alliance to Monitor Binance Compliance

The United States Department of Justice (DOJ) has selected Forensic Risk Alliance (FRA) to oversee Binance’s compliance with money-laundering regulations and trade sanctions, according to Bloomberg. This decision comes as part of Binance’s plea deal following allegations of violating financial regulations, which included a significant fine of $4.3 billion and the appointment of an independent compliance monitor.

Forensic Risk Alliance, a London-based consulting firm specializing in forensic accounting and compliance consulting services, was chosen over Sullivan & Cromwell, a prominent Wall Street law firm, and other contenders for the role. The selection of FRA underscores the importance of impartial oversight and adherence to regulatory standards in the cryptocurrency sector.

As part of the plea agreement, Binance is obligated to submit to a three-year monitorship, granting FRA access to internal records, facilities, and personnel. FRA’s expertise in corruption and fraud investigations positions the firm to effectively fulfill its monitoring duties and ensure Binance’s compliance with regulatory requirements.

The decision to appoint FRA reflects concerns over Sullivan & Cromwell’s association with FTX, a former competitor of Binance, and allegations of failure to detect fraudulent activities during FTX’s bankruptcy. While Sullivan & Cromwell may still be appointed by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) for a separate monitorship, the DOJ opted for FRA to oversee Binance’s compliance efforts.

This development underscores the increasing regulatory scrutiny facing cryptocurrency exchanges and highlights the pivotal role of independent monitors in maintaining transparency and regulatory adherence. Binance’s agreement to the monitorship and substantial penalties reflect the evolving regulatory landscape in the crypto industry and the need for robust compliance measures.