Binance to Face FRA Surveillance for the Next 3 Years

Key takeaways:

• FRA has been hired by the US DOJ to ensure that cryptocurrency exchange Binance complies with regulations over the next three years.
• FRA would be able to furnish the DOJ with regular updates on the company’s operations by gaining access to internal records, facilities, and workers.

Forensic Risk Alliance (FRA), an international consulting firm, has been hired by the US Department of Justice (DOJ) to ensure that cryptocurrency exchange Binance complies with regulations over the next three years.

One of the main conditions of Binance’s November 2023 plea agreement, in which it admitted guilt to money laundering and other federal offenses and agreed to pay a $4.3 billion fine, was the appointment of a third-party company to oversee the exchange’s compliance over the following three years.

As per a Bloomberg report, FRA would be able to furnish the DOJ with regular updates on the company’s operations by gaining access to internal records, facilities, and workers.

The DOJ appointed FRA instead of the law firm Sullivan & Cromwell, which was apparently first in line for the contract due to the firm’s previous work for competitor cryptocurrency exchange FTX before its bankruptcy.

Sullivan & Cromwell was accused by FTX creditors on February 17 of actively participating in the “multibillion-dollar fraud” committed by the FTX Group.

Sullivan & Cromwell is allegedly expected to be chosen for a different five-year monitoring position for Binance, serving as the Financial Crimes Enforcement Network representative for the Treasury Department.

The appointment was made just a few weeks after Changpeng “CZ” Zhao’s prison sentence as the previous CEO of Binance.

Zhao was sentenced to four months in prison on April 30 for failing to update the cryptocurrency exchange’s anti-money laundering program.

Judge Jones handed down a lighter sentence despite the prosecution’s initial request for a three-year prison term. The judge reasoned that Zhao could not have been directly notified of any specific criminal conduct at Binance.

Tigran Gambaryan, the head of Binance’s financial crime compliance team, has to be released immediately, according to Binance CEO Richard Teng to the Nigerian government. Teng voiced serious concerns over Gambaryan’s protracted arrest of more than 70 days and denounced the Nigerian government’s action in a thorough blog post on May 7.