DOJ selects Forensic Risk Alliance as outside monitor for Binance Holdings

21 May 2024 Consulting.us 1 min. read

The US Department of Justice has chosen Forensic Risk Alliance (FRA), a London-based forensic accounting and regulatory consulting firm, to serve as outside monitor of cryptocurrency exchange Binance Holdings Ltd, Bloomberg reported on May 10.

The three-year monitorship is a condition of Binance’s November plea deal, in which the world’s largest crypto exchange pleaded guilty to violating US money-laundering regulations and trade sanctions and agreed to pay $4.3 billion in penalties. The company’s founder Changpeng Zhao also pleaded guilty, agreed to step down as CEO, and was sentenced to four months in prison on April 30.

Binance was originally based in China, then moved to Japan and then Malta. The crypto exchange currently has no headquarters.

As monitor, FRA will gain access to Binance’s internal records, facilities, and employees and will report to the government on the firm’s compliance with the plea agreement.

DOJ selects Forensic Risk Alliance as outside monitor for Binance Holdings

FRA has over 200 professionals and 12 offices across North America, Europe, the Middle East, and Asia. The firm works on high-stakes compliance matters in fraud, bribery, corruption, financial crime, sanctions, ESG, audit and accounting malpractice, and corporate transactions.

FRA has dealt with regulators such as the DOJ, SEC, the UK Serious Fraud Office (SFO), US Office of Foreign Assets Control (OFAC), and many other foreign regulatory authorities.

Law firm Sullivan & Cromwell was the initial frontrunner for the monitorship, sources told Bloomberg, but the DOJ ultimately decided not to select the firm because of its work for FTX.

Sullivan & Cromwell worked for the crypto exchange prior to its November 2022 bankruptcy, as well as afterwards as main outside counsel. Many who lost money in FTX’s collapse have blamed the law firm for failing to detect co-founder Sam Bankman-Fried’s fraudulent activities.