According to the latest report, the US Department of Justice (DOJ) has granted three years of Binance monitoring to consulting firm Forensic Risk Alliance (FRA). The appointment is part of a plea deal the exchange struck with the Department of Justice last year.

In November 2023, Binance entered into a plea deal with the Department of Justice regarding money laundering violations, agreeing to pay $4.3 billion in fines and appoint an independent compliance monitor. Company co-founder Changpeng “CZ” Zhao also agreed to step down as CEO as part of the deal, and was recently sentenced to four months in prison.

Here's why the Department of Justice chose FRA over Sullivan and Cromwell

Citing anonymous sources, Bloomberg recently mentioned Forensic Risk Alliance has received approval from Wall Street law firm Sullivan & Cromwell to act as an independent monitor for Binance Holdings Ltd. The controller is tasked with evaluating a company's practices to eliminate misconduct and establish an effective ethics and compliance program.

Hence, if there is any truth to the recent revelations, the London-based FRA will likely be able to access Binance's internal records and documents, while ensuring the exchange's compliance with the plea agreement over a period of three years.

According to the report, New York-based Sullivan & Cromwell (S&C) was one of the leading candidates for the monitoring role. However, it appears that the law firm's controversy over its work on the now-defunct FTX exchange may have influenced the DOJ's decision to go to the FRA instead.

As Bitcoinist reported in February, FTX creditors launched a class-action lawsuit against Sullivan & Cromwell, accusing the law firm of complicity in the stock market's collapse. FTX's new management has always defended S&C while touting the company's recovery efforts.

On Wednesday, May 8, FTX announced that its clients would be fully compensated for their losses resulting from the collapse.

Binance will pay $4 million in Canada due to compliance issues

Besides the United States, Binance is facing significant pressure from regulatory bodies in other countries. Recently, the world's largest cryptocurrency exchange was fined $4.4 million ($6 million CAD) by Canada's financial regulator, FINTRAC.

FINTRAC accused Binance of not complying with anti-money laundering protection measures. As reported by Bitcoinist, the company failed to register with the Canadian financial regulator and report large virtual currency transactions.

While Binance's regulatory issues continue to mount, the exchange has maintained its commitment to increasing compliance. The recent establishment of the company's first board of directors appears to be a step in this direction.

The total cryptocurrency market cap at $2.194 trillion | Source: TOTAL chart on TradingView

Featured image from Unsplash, chart from TradingView