Binance 3-Year Monitorship To Be Handled By FRA – Details

by

As an experienced financial analyst, I closely follow regulatory developments and compliance issues related to major cryptocurrency exchanges, including Binance. Based on the available information, it appears that the DOJ’s decision to appoint Forensic Risk Alliance (FRA) as the independent monitor for Binance instead of Sullivan & Cromwell might have been influenced by the controversy surrounding the latter firm’s role in the FTX exchange debacle.

Based on the most recent findings, the US Department of Justice (DOJ) has approved a three-year oversight by consulting firm Forensic Risk Alliance (FRA) for Binance. This arrangement is included in Binance’s plea agreement with the DOJ from last year.

In November 2023, Binance reached a plea agreement with the Department of Justice (DOJ) over money laundering allegations. Under the terms of the deal, Binance consented to pay a fine of $4.3 billion and designate an independent compliance officer. The company’s co-founder, Changpeng “CZ” Zhao, relinquished his position as CEO and was subsequently sentenced to serve a four-month jail term.

Here’s Why DOJ Chose FRA Over Sullivan & Cromwell

As a researcher, I’ve come across an intriguing piece of news from Bloomberg. According to their report, Forensic Risk Alliance was chosen over Sullivan & Cromwell for the role of an independent monitor in Binance Holdings Ltd. The function of an independent monitor is crucial as it involves assessing a company’s operations to root out any unethical conduct and establish robust ethics and compliance programs.

As an analyst, I would interpret this situation as follows: If the recent disclosures hold any merit, then the Financial Conduct Authority (FCA) based in London will presumably be granted access to Binance’s internal records and documents. This access is expected to continue for a period of three years, ensuring that Binance adheres to the terms of their plea agreement with the FCA.

Based on the findings in the report, Sullivan & Cromwell, headquartered in New York, was among the leading contenders for the monitor position. However, it seems that the contentious issues surrounding the law firm’s involvement with the defunct FTX exchange may have played a role in the Department of Justice (DOJ) opting for FRA instead.

According to Bitcoinist‘s report from February, creditors of FTX have filed a class action lawsuit against Sullivan & Cromwell. They allege that the law firm played a role in FTX’s downfall and are therefore holding them accountable. Meanwhile, FTX’s current leadership has consistently supported Sullivan & Cromwell while highlighting their efforts to revive the company.

On May 8, 2023, I, FTX, pledged to make our valued customers whole again by fully compensating them for any losses they incurred during the recent market downturn.

Binance To Pay $4 Million In Canada Due To Compliance Issues

In addition to the US, Binance has encountered substantial scrutiny from regulatory authorities outside the United States. More recently, this prominent cryptocurrency exchange was penalized with a fine amounting to $4.4 million (C$6 million) by Canada’s financial regulatory body, FINTRAC.

As a crypto investor, I’ve come across news that Binance, a well-known cryptocurrency exchange, has been accused of not adhering to money-laundering regulations set by FINTRAC, Canada’s financial intelligence agency. The allegation is that Binance neglected to register with this regulatory body and report significant virtual currency transactions, as required by law.

Amidst growing regulatory issues for Binance, the exchange has consistently expressed its dedication towards enhancing compliance. A noteworthy step in this regard was the formation of their inaugural board of directors.

Binance 3-Year Monitorship To Be Handled By FRA – Details

Read More

2024-05-12 13:41