- Binance is reportedly set to undergo regulatory mentorship as part of its DOJ settlement deal.
- A New York-based law firm has reportedly surfaced as a potential independent monitor for the exchange.
- The scheduled sentencing trial for Binanceโs Chnagpeng Zhao was recently postponed.
The year-long legal battle against Binance, a crypto exchange, came to a head in November 2023, when the U.S. Department of Justice secured felony pleas from the exchange and its founder, Changpeng Zhao, on several criminal charges. With a $4.3 billion fine and the ousting of CZ as CEO, the settlement triggered severe legal consequences, marking one of the largest cases in crypto history.
But Binance’s legal woes are far from over. As part of its settlement agreement, Binance will be subject to regulatory oversight by both the Justice and Treasury Departments for periods of three and five years, respectively.
Sponsored
While official details regarding this part of the settlement agreement remain withheld by authorities, new reports have suggested which firm is likely to be tasked with overseeing the exchange’s compliance.
Binance Mentorship Set?
According to a February 16 Bloomberg report, New York-based law firm Sullivan & Cromwell has emerged as a leading candidate among the contenders for the position of โindependent monitorโ for Binance.
The appointment aims to ensure adherence to the provisions of its settlement deal with the Justice and Treasury Departments, such as compliance with revised regulatory standards and the U.S anti-money laundering requirements.
While official announcements from proper channels are pending, the report stated that the law firm, which also served as the legal practitioner for the now-defunct exchange FTX in its bankruptcy proceedings, is being considered by the DOJ, citing anonymous sources.
If appointed, Sullivan and Cromwell will be responsible for overseeing Binance’s operations, conducting periodic assessments, and providing reports to the government.
Binance founder Changpeng Zhao is currently awaiting the sentencing hearing for his guilty plea, which was recently postponed.
Changpeng Zhaoโs Hearing Delayed
On Monday, February 12, the sentencing trial for the former Binance CEO, originally scheduled for February 23, 2034, was postponed until April 30.
The extension marks an additional 60-day waiting period for the Binance founder, whoโs currently grounded within the United States following prosecutors’ arguments that he poses a flight risk.
Zhao faces a potential sentence of up to ten years behind bars. Despite his guilty plea, which allows him to appeal any sentence exceeding 18 months, the prosecutors’ stern approach to the case raises the possibility of him receiving a harsher sentence.
On the Flipside
- Changpeng Zhao recently reappeared on social media platform X, following a two-month hiatus.
- CZโs guilty plea to the DOJโs criminal charges shields Binance from facing potential charges of market manipulation or user funds misappropriation.
- The 4.3 billion fine paid to the DOJ included a personal $50 million fine for ZHO. However, his future still looks uncertain.
Why This Matters
The impact of appointing an independent monitor for Binance is a two-edged sword. While the intensified regulatory scrutiny may present challenges to the exchangeโs activities by placing its operations under a microscopic lens, it may also rectify the deficiencies in its compliance actions and restore its reputation with authorities.
Read more about the clarification of Trust wallet amid reports of an ongoing security-based scrutiny:
Binance Trust Wallet Disputes Security Concerns Amid Scrutiny
To discover more about Changpeng Zhao’s restricted movements to the United States, read here:
Ex-Binance CEO CZโs Travel Plans Vetoed as Sentencing Nears
