The Department of Justice (DOJ) is rethinking its choice to designate Sullivan & Cromwell as Binance‘s impartial overseer due to their connection with FTX.
Based on Bloomberg’s report, the law firm was close to being appointed to ensure Binance adhered to a settlement requiring a $4.3 billion fine for violating U.S. laws against money laundering and sanctions. This role was part of an arrangement between the Justice Department and Financial Crimes Enforcement Network (FinCEN).
Although the decision has been delayed due to Sullivan & Cromwell’s past involvement with FTX, concerns have arisen over the law firm’s handling of FTX’s legal affairs before and after its bankruptcy in November 2022. The scrutiny focuses on Sullivan & Cromwell’s ability to oversee these matters effectively, leading to criticism.
The Department of Justice officials are currently considering other potential choices for the monitorship role, but FinCEN still favors Sullivan & Cromwell as their top pick.
Following FTX founder SBF’s departure, a string of legal actions have been initiated against the company.
— Sunil (FTX Creditor Champion) (@sunil_trades) April 13, 2024
While working with FTX, Sullivan & Cromwell earned approximately $170 million in fees from overseeing bankruptcy proceedings. Their duties involved identifying assets valued in the billions of dollars. An FTX lawyer once assured the bankruptcy court that creditors could potentially regain all their funds. However, Sullivan & Cromwell has encountered legal disputes from FTX customers and is currently under scrutiny by a bankruptcy investigator for their services rendered prior to the company’s collapse.
Sam Bankman-Fried, one of FTX’s co-founders who received a 25-year sentence recently, named Sullivan & Cromwell as among the parties implicated in his defense during court proceedings. However, Sullivan & Cromwell insists that their involvement with FTX was minimal, a claim backed by the new leadership of FTX who question the validity of Bankman-Fried’s accusations against them.
If given the task, the Binance monitor would conduct a thorough examination of the company’s compliance with regulatory rules.
To ensure a complete adherence to the established legal requirements, this process involves examining our internal records and engaging in direct communication with our team members.
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2024-04-15 23:44