The Department of Justice (DOJ) is revisiting its decision to appoint a prominent New York law firm, Sullivan & Cromwell, for a crucial role overseeing Binance due to concerns over the firm’s past involvement with FTX, a rival exchange.
The DOJ, along with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), mandated court-ordered oversight, known as a monitorship, for Binance as part of a plea agreement resolving charges related to anti-money laundering and sanctions violations. The monitorship, expected to last three to five years, was initially assigned to Sullivan & Cromwell, with former federal prosecutor Sharon Cohen Levin set to lead the team.
However, Bloomberg reported that DOJ officials are reevaluating this decision following criticism of the law firm’s prior work for FTX, which was once a competitor to Binance. While FinCEN remains committed to Sullivan & Cromwell, alternative candidates are being considered for the monitorship role.
Sullivan & Cromwell’s involvement with FTX has raised eyebrows, particularly in light of a class-action lawsuit filed by FTX investors alleging the firm’s complicity in an $8 billion fraud. The lawsuit claims that Sullivan & Cromwell’s advisory role provided unique insights into FTX’s operations, potentially creating conflicts of interest.
Last month, a US bankruptcy judge authorized an investigation into Sullivan & Cromwell’s ties to FTX to determine any conflicts of interest. This decision followed the firm’s submission of invoices exceeding $170 million for its services to the now-defunct exchange.
At the time of reporting, Sullivan & Cromwell, the DOJ, and FinCEN had not responded to requests for comment.
