The US Department of Justice (DOJ) has taken a significant step in ensuring that cryptocurrency exchange Binance complies with regulations by hiring Forensic Risk Alliance (FRA) to oversee the company’s operations over the next three years. This move comes as part of Binance’s plea agreement in November 2023, where the exchange admitted guilt to money laundering and other federal offenses and agreed to pay a hefty $4.3 billion fine.
FRA, an international consulting firm, will have access to Binance’s internal records, facilities, and workers, providing regular updates to the DOJ on the company’s compliance. This decision to appoint FRA over law firm Sullivan & Cromwell, which was initially in line for the contract, comes after allegations of Sullivan & Cromwell’s involvement in fraudulent activities with competitor cryptocurrency exchange FTX.
The appointment of FRA comes shortly after the sentencing of former Binance CEO Changpeng “CZ” Zhao to four months in prison for failing to update the exchange’s anti-money laundering program. Despite the prosecution’s request for a three-year prison term, the judge handed down a lighter sentence, citing Zhao’s lack of direct involvement in any specific criminal conduct at Binance.
In a related development, Binance CEO Richard Teng has called for the immediate release of Tigran Gambaryan, the head of Binance’s financial crime compliance team, who has been detained by the Nigerian government for over 70 days. Teng expressed serious concerns over Gambaryan’s prolonged arrest and criticized the Nigerian government’s actions in a blog post on May 7.
As Binance continues to navigate regulatory challenges and legal scrutiny, users in Nigeria have also raised concerns, demanding transparency and accountability from the exchange. With the appointment of FRA and ongoing legal battles, the future of Binance remains uncertain as it strives to regain trust and compliance in the cryptocurrency market.
