4 months ago
22 ARTICLE AD
FRA takes on Binance oversight amid FTX repayment controversies.
The US Department of Justice (DOJ) has chosen Forensic Risk Alliance (FRA) for Binance Holdings’ three-year monitorship over initial favorite Sullivan & Cromwell (S&C), BNB Bloomberg reported today.
This is a requirement of Binance’s November plea deal for violating money-laundering regulations and trade sanctions. Binance also agreed to a $4.3 billion penalty, and CEO Changpeng Zhao stepped down and received a four-month prison sentence.
FRA’s role will involve scrutinizing Binance’s internal operations to ensure compliance and reporting findings to the government. The firm has a history of similar assignments, including consultancy for Gunvor SA during its $660 million settlement with the DOJ.
The selection of FRA over Sullivan & Cromwell, a prominent Wall Street law firm, marks a shift from the expected outcome. The firm was initially considered for the role but ultimately rejected. This is likely due to their past work on FTX, Binance’s rival crypto exchange that went bankrupt in November 2022.
Sullivan & Cromwell has come under fire from FTX investors for its involvement with the company. A group of FTX investors, who initiated a lawsuit against the firm in February, claimed the firm knowingly provided services or assistance that directly enabled or facilitated FTX’s fraudulent activities.
This week, FTX unveiled a new plan to pay out at least 118% of recognized claims to 98% of its creditors. The reorganization plan, subject to approval by the Bankruptcy Court, faced pushback from Sunil Kavuri, who represents the largest group of FTX creditors. He argued that repayments should reflect the current market prices of assets, not their value at the time of FTX’s bankruptcy.
Kavuri also cited S&C’s previous relationship with the exchange. He opposes the inclusion of an exculpation clause that would protect S&C from lawsuits related to misconduct.
The DOJ’s choice of FRA for the Binance monitorship has been welcomed by those affected by the FTX collapse, with Kavuri stating, “Truth prevails.”
We asked @TheJusticeDept and Judge Kaplan to hold co-conspirators accountable at SBF’s sentencing
Sullivan and Cromwell were the lead to monitor Binance
DOJ has now picked Forensic Risk Alliance to monitor Binance
Well done to every FTX customer for all the victim impact… pic.twitter.com/DuDjaAr8F3
— Sunil (FTX Creditor Champion) (@sunil_trades) May 10, 2024
However, the report noted that S&C might still be appointed as a monitor for Binance by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
Crypto Briefing may augment articles with AI-generated content created by Crypto Briefing’s own proprietary AI platform. We use AI as a tool to deliver fast, valuable and actionable information without losing the insight - and oversight - of experienced crypto natives. All AI augmented content is carefully reviewed, including for factural accuracy, by our editors and writers, and always draws from multiple primary and secondary sources when available to create our stories and articles.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
