The Forensic Risk Alliance (FRA) has been appointed by the American Department of Justice (DOJ) to take charge of monitoring compliance operations for the cryptocurrency exchange Binance for the next three years. This decision comes in the aftermath of Binance’s admission of guilt in money laundering and other federal crimes, resulting in a hefty fine. It is the latest in a series of similar developments.
FRA will oversee Binance’s adherence to existing laws, marking a significant move in the ongoing regulatory case against cryptocurrencies and the industry as a whole. This appointment is long-awaited and aims to undermine Binance’s offshore operations.
The DOJ selected FRA, a renowned international consultancy agency based in the Netherlands, to monitor Binance. This decision was made as part of the DOJ’s efforts to distance itself from policing the company’s activities. The settlement between the DOJ and Binance stipulates the appointment of an independent monitor for a three-year term. FRA’s role will involve comprehensive monitoring of Binance’s exchange system, including access to internal records and premises, to provide the DOJ with up-to-date information.
After careful consideration, the Department of Justice chose FRA over Sullivan & Cromwell (SC), a prominent Wall Street law firm. Initially, SC seemed like the top candidate for the job. However, SC’s involvement with the bankrupt rival crypto exchange FTX raised concerns about potential bias and conflicts of interest, prompting the DOJ to support FRA instead.
Binance’s agreement to undergo scrutiny demonstrates a heightened level of transparency and compliance in the cryptocurrency industry. Exchanges like Binance are now cautious when dealing with government agencies, ensuring strict adherence to anti-money laundering (AML) and know your customer (KYC) regulations. The appointment of FRA indicates the DOJ’s commitment to safeguarding the financial sector from illicit activities such as terrorism financing and crypto scams.
