As a crypto investor with several years of experience in this industry, I’m closely following the developments surrounding Binance and its selection of Forensic Risk Alliance (FRA) as its outside monitor. While it’s unfortunate to see one of the biggest players in the crypto space facing such regulatory challenges, I believe that FRA’s expertise in corruption, fraud investigations, and compliance will be instrumental in ensuring Binance adheres to the plea agreement and maintains transparency with the government.
The Justice Department appointed Forensic Risk Alliance as the third-party watchdog for Binance following the cryptocurrency exchange’s admission of breaking US anti-money laundering laws and trade sanctions.
Based on unnamed sources who cited confidentiality as a reason for anonymity, the Forensic Risk Alliance (FRA) emerged as the preferred choice among Sullivan & Cromwell and other leading competitors in the selection process.
As a crypto investor, I’ve been keeping an eye on the latest developments regarding Binance, the world’s largest cryptocurrency exchange. However, neither the Justice Department nor representatives from Sullivan & Cromwell and FRA have given any immediate comments on the recent news. The monitor appointment mentioned is a condition of Binance’s November plea agreement, which also includes a hefty $4.3 billion penalty. Binance’s founder, Changpeng Zhao, admitted guilt and agreed to relinquish his CEO position, resulting in a four-month prison sentence that began on April 30th.
FRA’s role is to oversee Binance’s adherence to the plea agreement, providing access to the company’s internal records, facilities, and personnel for reporting purposes to the government. With a strong background in corruption, fraud probes, and compliance matters, FRA has previously worked with Gunvor SA during their $660 million settlement with the Department of Justice over allegations of foreign bribery.
At first, Sullivan & Cromwell seemed the top contender for the position. However, their association with FTX, a competitor of Binance, brought about challenges. The firm’s previous representation of FTX before its bankruptcy filing in November 2022 and subsequent role as FTX’s primary external counsel sparked apprehensions.
Detractors, among them individuals who suffered financial losses due to FTX’s demise, have criticized Sullivan & Cromwell for not uncovering Sam Bankman-Fried’s deceit as co-founder of the collapsed firm. Contrarily, FTX’s new leadership has defended the law firm and commended its significant contributions to the company’s recovery process.
FTX has declared this week that they will reimburse their clients, including interest, for any financial setbacks experienced during the bankruptcy process.
As a crypto investor, I’m excited to share that although Sullivan & Cromwell wasn’t chosen as the outside monitor for Binance by the selection committee, they are still in the running for a separate five-year monitorship with Binance, on behalf of the Treasury Department’s Financial Crimes Enforcement Network. This means that even if they didn’t get the initial monitoring role, they have a strong chance of securing the position at a later date.
As a researcher examining this situation, I would describe my task as follows: I am responsible for scrutinizing large volumes of data, specifically transactions flagged as suspicious by regulatory authorities such as the Treasury Department. Previously, it was alleged that Binance failed to address these potentially illicit activities. My role is to ensure thorough investigation and reporting of these findings.
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2024-05-10 23:38