Crypto News- Binance Under Watch: The recent appointment of Forensic Risk Alliance (FRA) as Binance’s monitor by the US Department of Justice (DOJ) raised eyebrows, especially considering the initial frontrunner, Sullivan & Cromwell, was bypassed. The decision stemmed from crucial factors tied to Binance’s tumultuous past.
Binance Under Watch: DOJ Teams Up with Forensic Risk Alliance to Keep Tabs on Binance
Binance’s entanglement with the DOJ began with a hefty $4.3 billion penalty imposed under a plea agreement from last November. This agreement also saw Binance’s founder, Changpeng Zhao, stepping down as CEO and facing a four-month prison sentence for his involvement. With FRA now at the helm, their mandate is vast – overseeing Binance’s adherence to the terms of the plea deal, with access to internal records, facilities, and personnel for comprehensive monitoring.
Sullivan & Cromwell, a distinguished Wall Street law firm, initially seemed like the natural choice. However, its ties to the now-defunct FTX led to its dismissal. Critics, particularly those affected by FTX’s collapse, blamed Sullivan & Cromwell for overlooking fraud within FTX, tarnishing its reputation.
Relief in the Crypto Community as Sullivan & Cromwell Gets Sidelined
This decision garnered approval from the crypto community, with many relieved to see Sullivan & Cromwell sidelined. “After bureaucratic delays, Binance finally has a monitor, and Sullivan & Cromwell gets the boot,” tweeted crypto enthusiast Rho Rider.
Despite this setback, Sullivan & Cromwell is anticipated to secure a separate five-year monitorship with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). This role will focus on ensuring Binance complies with reporting requirements for suspicious activities, addressing concerns raised by the Treasury.
Meanwhile, Binance has been making strides in regulatory compliance elsewhere. In India, it agreed to a fine imposed by the Financial Intelligence Unit (FIU-IND) to continue its operations amidst stringent anti-money laundering (AML) laws. Additionally, Canada’s FINTRAC slapped Binance with a $4.4 million fine for failing to meet AML regulations, underscoring the ongoing regulatory hurdles in the crypto sector.
FAQs
Why FRA Over Sullivan & Cromwell?
FRA was chosen due to Sullivan & Cromwell’s ties to FTX, which faced criticism for alleged fraud.
Community Response to the Decision?
The crypto community approved, relieved to see Sullivan & Cromwell sidelined.
Sullivan & Cromwell’s Expected Role?
Despite being bypassed, it’s anticipated to monitor Binance’s compliance with FinCEN for suspicious activities.
Binance’s Regulatory Challenges Outside the US?
Binance faced fines in India and Canada for AML violations, highlighting global regulatory hurdles.
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