After flirting with a countersuit, Standard Chartered Bank is slowly coming around to the deal offered them by New York’s Department of Financial Services in a money-laundering scandal. The bank has agreed to an outside monitor that would oversee compliance with state and federal anti-money laundering laws. This is a prelude to agreeing to an expansive settlement, enabling Standard Chartered to keep their ability to operate in the state of New York.

New York banking Superintendant Benjamin Lawsky alleged London-based Standard Chartered flouted U.S. banking laws as part of a decade-long deception, helping launder about $250 billion in Iranian funds in contravention of U.S. statutes and without proper disclosure. Lawsky is said to seek as much as $700 million to settle the investigation, another person familiar with the case said.

The regulator’s threat panicked the bank’s investors, sent its share price down about 16 percent the day after and provoked a defiant response from Standard Chartered Chief Executive Officer Peter Sands, who said the vast majority of wire transfers identified by Lawsky complied with federal law. The bank’s stock is down about 10 percent for the week.

According to the terms of the order, the state regulator will select the monitor, and the bank will pay for it and provide access to all compliance and transaction records.

A $700 million fine for facilitating money laundering is not debilitating, but for context, consider that Goldman Sachs was fined $550 million for their Abacus fund, for which they made at least three times that. And Benjamin Lawsky could still revoke the charter of the bank, a move that’s entirely at his discretion. But the two sides are in settlement negotiations at this point. Reuters reports that the fine could reach upwards of $1 billion.

Standard Chartered keeps huffing that these matters are normally settled by coordinated action across state and federal regulators. So their alibi is about protocol, and on a second level a claim that they didn’t money launder quite as much as what DFS has alleged. But they’ve completely backed down from their angry denunciation of Lawsky and threats to counter-sue. They’re going to take their medicine now, because they really have no choice.

The next move comes Wednesday, when Standard Chartered is due in court. Either a settlement will get announced at that time, a plea to postpone the court date to allow for more negotiation time, or the settlement talks will end, and Standard Chartered will have to fight to keep their US operations.