Sullivan & Cromwell, a Wall Street legal firm, and a number of other strong candidates lost out to the Forensic Risk Alliance (FRA), according to individuals who asked to remain anonymous since the situation is classified.

No comments were made immediately by the Justice Department, Sullivan & Cromwell, or FRA representatives. One of the conditions of Binance's November plea deal was the monitor appointment. The biggest cryptocurrency exchange in the world also agreed to pay $4.3 billion in fines. Changpeng Zhao, the creator of Binance, entered a guilty plea on April 30 and consented to resign as CEO. He was also sentenced to four months in prison.

FRA will make sure Binance complies with the plea deal by giving the business access to personnel, facilities, and internal data so it may update the government on its operations. FRA, a renowned authority on compliance, fraud investigations, and corruption, previously advised Geneva-based commodities trader Gunvor SA during its $660 million settlement with the Justice Department on allegations of foreign bribery.

At first, Sullivan & Cromwell was the front-runner for the position, but difficulties arose from their contentious work with Binance's competitor, FTX. Concerns were raised by the firm's engagement with FTX before to its bankruptcy in November 2022 and its subsequent function as FTX's primary outside counsel.

Opponents, such as those who suffered financial losses during FTX's demise, contended that Sullivan & Cromwell was negligent in overlooking co-founder Sam Bankman-fraud Fried's. However, FTX's new management commended the company's recovery efforts and defended the company against these allegations.

This Monday, FTX declared that it will reimburse all of its clients for any damages incurred during the bankruptcy, plus interest.

On behalf of the Financial Crimes Enforcement Network of the Treasury Department, Sullivan & Cromwell is expected to sign a separate five-year monitorship with Binance even though they were not chosen as the outside monitor.

The position entails locating and disclosing tens of thousands of transactions that raise red flags, some of which Binance was previously accused of neglecting by the Treasury Department.