The United States Department of Justice (DOJ) has recently granted a three-year monitorship of Binance to consulting firm Forensic Risk Alliance (FRA), as part of the exchange’s plea deal with the Justice Department related to money laundering violations. Binance, in November 2023, entered into a plea deal with the DOJ, agreeing to pay $4.3 billion in fines and appoint an independent compliance monitor. The company’s co-founder Changpeng “CZ” Zhao also agreed to step down as CEO as part of the deal and was recently sentenced to four months in jail.

The choice of FRA over Sullivan & Cromwell for the role of independent monitor for Binance appears to have come after careful consideration. The monitor will be tasked with evaluating the company’s practices to eliminate misconduct and establish an effective ethics and compliance program over the next three years.

Anonymous sources revealed that FRA was selected in favor of Sullivan & Cromwell, possibly due to the controversy surrounding the latter. This may have been influenced by Sullivan & Cromwell’s association with the now-defunct FTX exchange, which faced a class action lawsuit from creditors and ultimately ceased operations.

In addition to its challenges in the United States, Binance has been fined $4.4 million by Canada’s financial regulator, FINTRAC, for failure to comply with money-laundering protections. The company’s failure to register with the Canadian financial regulator and report large virtual currency transactions has resulted in significant regulatory pressure.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.