In a recent development, the US Department of Justice (DOJ) has appointed Forensic Risk Alliance (FRA) to oversee Binance's compliance with regulatory requirements for the next three years. This move follows Binance's admission to federal charges of money laundering and the payment of a $4.3 billion fine in November 2023. As part of the plea deal, Binance agreed to have a third-party monitor its compliance for three years.

FRA's Role

According to reports, FRA will have access to Binance's internal data, facilities, and personnel to assess the company's operations and report back to the DOJ. This appointment comes after the DOJ initially considered Sullivan & Cromwell for the role but ultimately chose FRA due to its experience with the now-defunct cryptocurrency exchange FTX. Notably, Sullivan & Cromwell is expected to be appointed for a separate five-year monitoring position with Binance, representing the Financial Crimes Enforcement Network of the Treasury Department.

Implications

This development follows the recent sentencing of Binance's former CEO, Changpeng Zhao, to a four-month prison term for failing to maintain the exchange's anti-money-laundering policies.

The appointment of FRA highlights the DOJ's emphasis on ensuring regulatory compliance in the cryptocurrency industry. As Binance navigates this new level of scrutiny, the industry will likely be watching closely to see how this oversight plays out.