DOJ Pulls Back from Choosing NY Law Firm for Binance Oversight, Citing FTX Connections
The Department of Justice (DOJ) is reportedly reconsidering selecting a prominent New York law firm to handle a critical assignment related to Binance, due to the firm’s prior work for rival exchange FTX.
As part of a plea agreement resolving anti-money laundering and sanctions violations charges, the DOJ and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) mandated court-ordered oversight for Binance. This oversight, known as a monitorship, would be implemented for three to five years.
Sullivan & Cromwell, the law firm managing FTX’s bankruptcy proceedings, was initially designated as Binance’s independent monitor. This appointment was a stipulation under the $4.3b agreement where Binance acknowledged culpability for infringing upon US money-laundering regulations and trade sanctions.
Further, former federal prosecutor Sharon Cohen Levin, a partner at the firm, was slated to lead the monitorship team.
However, Bloomberg reported Tuesday that DOJ officials have raised concerns regarding criticism levied against the law firm due to its prior work for FTX, which was a Binance competitor at one point.
In light of these concerns, the department is evaluating alternative candidates for the monitorship role. Sources told the outlet that FinCEN remains intent on appointing Sullivan & Cromwell.
Sullivan & Cromwell, the DOJ, and FinCEN didn’t return Cryptonews’ request for comment by press time.
Sullivan & Cromwell represented the now-defunct crypto exchange prior to its collapse and throughout its Chapter 11 proceedings. The firm subsequently submitted invoices exceeding $170m for its services.
These included locating billions of dollars in assets in order to facilitate creditor recoveries.
In February, FTX
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