The United States Department of Justice (DOJ) has reportedly chosen international consultancy firm Forensic Risk Alliance (FRA) to oversee cryptocurrency exchange Binance's compliance with regulatory standards for the next three years. This decision follows Binance's plea deal in November 2023, where it admitted to money laundering and other federal charges and was fined $4.3 billion. As part of the plea deal, Binance was required to have a third-party firm monitor its compliance activities for the specified duration.

FRA will be granted access to Binance's internal records, premises, and staff to provide regular updates to the DOJ on the exchange's operations, as per a Bloomberg report on May 10. Initially, law firm Sullivan & Cromwell was slated to undertake this role, but concerns arose due to its previous involvement with rival exchange FTX, which faced bankruptcy. Consequently, the DOJ opted for FRA instead of Sullivan & Cromwell.

Meanwhile, there are expectations that Sullivan & Cromwell may still play a role in Binance's compliance efforts. It is anticipated that the firm will be selected for a separate five-year monitoring role on behalf of the Treasury Department's Financial Crimes Enforcement Network. This development underscores the heightened scrutiny faced by Binance in light of its legal troubles and regulatory challenges.

The recent appointment of FRA comes in the wake of Binance's former CEO Changpeng "CZ" Zhao's imprisonment. Zhao was sentenced to four months in prison on April 30 for his failure to maintain an effective Anti-Money Laundering program at the exchange. Despite prosecutors initially seeking a longer prison term, the judge decided on a shorter sentence, citing a lack of evidence linking Zhao directly to specific illegal activities within Binance.