US Justice Department Appoints Monitor for Binance

The US Department of Justice has appointed the consulting firm Forensic Risk Alliance (FRA) to oversee Binance’s operations for a three-year period, according to Bloomberg.

The appointment of a monitor was a condition of the trading platform’s plea agreement. In November 2023, Binance agreed to pay fines amounting to $4.3 billion, and its founder, Changpeng Zhao, stepped down as CEO.

Sources indicate that FRA is tasked with ensuring compliance with the agreement. The firm will have access to internal records, premises, and employees to provide the Justice Department with information on the exchange’s status.

FRA specializes in investigating corruption and fraud incidents, as well as compliance. The company previously served as a consultant for Geneva-based commodity firm Gunvor SA, which also reached a $660 million resolution with US authorities over bribery charges.

Bloomberg insiders revealed that initially, the law firm Sullivan & Cromwell (S&C), which had worked with FTX before its collapse, was considered for the monitor role. However, the Justice Department opted for FRA.

Previously, creditors and liquidators of FTX had disagreements over a new compensation plan. Specifically, there were objections to an “exculpatory clause” for S&C, which absolves it of all potential liabilities.

In February, a group of creditors sued the law firm for allegedly aiding in the “multibillion-dollar fraud of FTX Group.”

Other candidates were also considered for the monitor position. It is reported that the Justice Department might select S&C to oversee Binance on behalf of FinCEN, to which the exchange has separately committed to reporting.

In April, a court sentenced the former CEO of Binance to four months in prison for failing to ensure anti-money laundering compliance on the platform.