In a significant development stemming from Binance’s tumultuous legal battles, the United States Department of Justice (DOJ) has tapped the expertise of international consultancy firm Forensic Risk Alliance (FRA) to meticulously monitor the cryptocurrency exchange’s adherence to regulatory standards over the next three years.

This stringent oversight, as mandated by Binance’s plea deal in November 2023, emerges in the wake of the exchange's admission of guilt to charges of money laundering and other federal offenses, coupled with a hefty $4.3 billion fine.

Under the watchful eye of FRA, Binance will be subject to comprehensive scrutiny, with the consultancy granted unfettered access to internal records, premises, and personnel. Bloomberg's report on May 10 underscores the pivotal role FRA will play in furnishing the DOJ with regular updates on Binance's operational landscape.

Interestingly, the selection of FRA over law firm Sullivan & Cromwell reflects a cautious approach by the DOJ, considering the latter's contentious association with rival crypto exchange FTX. Allegations of complicity in FTX's purported multibillion-dollar fraud, as asserted by FTX creditors in a class-action lawsuit, cast a shadow over Sullivan & Cromwell's eligibility for the monitoring role.

Despite missing out on the initial monitoring contract, there are indications that Sullivan & Cromwell might secure a distinct five-year oversight role for Binance, tasked by the Treasury Department’s Financial Crimes Enforcement Network.

The timing of FRA's appointment coincides closely with the incarceration of Binance's former CEO Changpeng “CZ” Zhao, who was sentenced to four months in prison on April 30 for the crypto exchange's failure to maintain a robust Anti-Money Laundering program. While prosecutors had sought a lengthier sentence, the judge's ruling underscored a lack of evidence linking Zhao directly to illicit activities within Binance.

As the cryptocurrency landscape continues to navigate regulatory headwinds, Binance finds itself under unprecedented scrutiny, with FRA poised to chart a course of compliance over the next three pivotal years.