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Unveiling Binance’s Hidden Layers: FRA Takes Charge in Explosive Oversight Role

As per the latest reports, the U.S. Department of Justice has sidelined Sullivan & Cromwell and chosen Forensic Risk Alliance (FRA) to oversee compliance efforts at Binance Holdings Ltd. because of the former’s due involvement in the FTX bankruptcy case. 

FRA Takes Charge of Binance Monitorship

The FRA has been successfully appointed over the initially favored Wall Street heavyweight Sullivan & Cromwell. The DOJ’s decision reflects concerns that the law firm had previously engaged in the FTX scandal that shook the whole of America. 

Known for its expertise in corruption and fraud investigations, Forensic Risk Alliance has now been appointed to ensure Binance’s adherence to the stringent conditions laid out in its November plea deal, including a substantial $4.3 billion fine. Not to forget, the wealthiest in the crypto world, ex-CEO of Binance, Changpeng Zhao, has also agreed to serve a brief prison sentence, after having resigned from his post, both being a part of their agreement.

The newly appointed monitor, FRA, will ensure compliance by accessing Binance’s internal records and personnel and directly reporting its findings to the government. What likely influenced the DOJ’s decision is FRA’s prior experience, including its efficient role in high-stakes international compliance cases, like its work with Geneva-based Gunvor SA.

The Controversy Surrounding Sullivan & Cromwell:

The reason why Sullivan & Cromwell faced setbacks in its plea over Binance monitorship was due to its role in the FTX bankruptcy proceedings. “The white-shoe law firm’s controversial handling of the FTX bankruptcy” played a significant factor in the DOJ’s decision to appoint FRA, says Bloomberg.

Moreover, the firm’s inability to detect fraud was raised by concerned  FTX investors, as the law firm couldn’t stop the crypto exchange’s dramatic collapse. Sullivan & Cromwell’s incompetency in the FTX bankruptcy case casted a shadow over its candidacy for the Binance monitorship.

However, everyone needs a second chance. That’s why Sullivan & Cromwell is reported to be under consideration by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) for a separate five-year monitorship. In this separate deal, Sullivan & Cromwell will focus on identifying and reporting suspicious activities previously overlooked by Binance.

SOURCE

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