The
Department
of
Justice
(DOJ)
has
chosen
a
London-based
consulting
firm
for
a
coveted
three-year
monitorship
of
Binance,
according
to
a
Friday
report
from
Bloomberg
citing
anonymous
sources.
As
part
of
Binance’s
plea
deal
with
the
DOJ
earlier
this
year,
the
crypto
exchange
agreed
to
pay
$4.3
billion
in
fines
and
appoint
an
independent
compliance
monitor.
The
firm’s
CEO
and
co-founder
Changpeng
“CZ”
Zhao
also
agreed
to
step
down
as
part
of
the
agreement,
and
was
sentenced
to
four
months
in
prison.
According
to
the
report,
Forensic
Risk
Alliance
(FRA)
was
chosen
to
monitor
Binance
over
the
previous
frontrunner,
Sullivan
&
Cromwell,
due
to
the
white-shoe
law
firm’s
controversial
handling
of
the
FTX
bankruptcy.
A
spokesperson
for
the
DOJ
declined
to
comment.
FTX
investors
filed
suit
against
Sullivan
&
Cromwell
in
February,
alleging
that
the
firm
–
which
did
some
limited
work
(valued
at
approximately
$8.5
million)
for
FTX
before
its
collapse
–
not
only
failed
to
detect
the
widespread
fraud
at
the
exchange
but
“actively
participated”
in
it,
before
becoming
the
exchange’s
bankruptcy
counsel
–
a
lucrative
job
that
has
netted
Sullivan
&
Cromwell
nearly
$200
million
in
lawyers
fees.
Sullivan
&
Cromwell
has
denied
the
allegations,
saying
that
their
pre-bankruptcy
work
with
FTX
was
limited
in
scope
and
“largely
transactional.”
Current
FTX
management,
including
CEO
John
J.
Ray
III
has
defended
Sullivan
&
Cromwell’s
work.
Sullivan
&
Cromwell’s
appointment
as
FTX’s
bankruptcy
counsel
met
with
some
resistance
–
including
from
creditors,
the
U.S.
Trustee
and
four
U.S.
senators
–
but
was
ultimately
allowed
to
move
forward.
According
to
Bloomberg’s
report,
Sullivan
&
Cromwell
is
still
expected
to
be
appointed
by
the
U.S.
Treasury
Department’s
Financial
Crimes
Enforcement
Network
(FinCEN)
to
a
different,
five-year
monitorship
of
Binance.
Edited
by
Kevin
Reynolds.
UPDATE
(May
10,
2024
19:29
UTC):
Adds
that
the
DOJ
declined
to
comment.
