Binance’s Three-Year Compliance Monitor

The US Department of Justice (DOJ) has appointed Forensic Risk Alliance (FRA) as the independent compliance monitor for Binance for the next three years. This appointment is part of Binance’s plea deal with the DOJ in 2023.

Why FRA Was Chosen

Bloomberg reports that FRA was selected over Sullivan & Cromwell (S&C) due to S&C’s involvement with the now-defunct FTX exchange. FTX creditors have filed a lawsuit against S&C, alleging that the law firm was complicit in FTX’s collapse.

FRA’s Role

FRA will have access to Binance’s internal records and documents to ensure that the exchange complies with the plea agreement. Their goal is to evaluate Binance’s practices, eliminate misconduct, and establish an effective compliance program.

Binance’s Compliance Challenges

Binance has faced regulatory pressure from other countries as well. Canada’s financial regulator, FINTRAC, recently fined Binance $4.4 million for failing to comply with money-laundering protections.

Binance’s Commitment to Compliance

Despite these challenges, Binance has stated its commitment to improving compliance. The establishment of its first-ever board of directors is seen as a step in this direction.