Changpeng Zhao, the founder of cryptocurrency exchange Binance, stepped down from his chief executive role on Tuesday, after pleading guilty to failing to prevent money laundering on his company's platform.

The entity that operates Binance, the world's largest cryptocurrency exchange, also pled guilty on Tuesday to violating the Bank Secrecy Act (BSA), an anti-money laundering act, and other charges. In doing so, the crypto company agreed to pay more than $4 billion, marking one of the largest corporate penalties in U.S. history, according to U.S. Attorney General Merrick Garland.

Zhao announced his decision to step down as Binance's CEO on X, formerly known as Twitter, later Tuesday, saying his choice is "best for our community, for Binance" and for himself.

"Binance is no longer a baby," Zhao wrote. "It is time for me to let it walk and run. I know Binance will continue to grow and excel with the deep bench it has."

The Justice Department said Zhao pled guilty to failing to maintain an effective anti-money laundering program, a violation of the BSA.

“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed — now it is paying one of the largest corporate penalties in U.S. history,” Garland said. “The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal.”

Binance, which launched in 2017, admitted to putting growth and profits over compliance with U.S. law, according to the Justice Department (DOJ), citing court documents.

In becoming the largest cryptocurrency exchange in the world, Binance's greatest share of customers was from the United States, according to the DOJ. As part of serving U.S. customers, the company was required to register with the Treasury Department's Financial Crimes Enforcement Network (FinCEN) as a money services business, as well as establish a program to prevent money laundering on its platform.

"Binance chose not to comply with U.S. law and failed to implement controls and procedures to prevent money laundering," the DOJ wrote in a statement, adding the company also did not put in place controls to prevent U.S. customers from conducting transactions with those in sanctioned jurisdictions.

In 2019, the company announced it would block U.S. customers and launched a separate U.S. exchange called Binance.US.

Binance, however, continued to maintain a "substantial" number of U.S. customers, specifically those who boosted the company's trading volume and revenue, the DOJ said.

Federal prosecutors said U.S. users generated more than $1.6 billion in profit for Binance between August 2017 and October 2022.

For years, Binance also did not file a suspicious activity report with the Treasury Department and allowed users to open accounts and trade without any information besides an email address, according to prosecutors.

The company was first accused of U.S. security law violations over the summer, accusations that were similar to the practices revealed in last year's collapse of FTX, the second-largest cryptocurrency exchange, according to The Associated Press.

“Ever since Binance launched its convertible virtual currency platform, it has knowingly evaded the U.S. laws designed to protect these systems,” Treasury Secretary Janet Yellen said. “Binance was allowing illicit actors to transact freely, supporting activities from child sexual abuse, to illegal narcotics, to terrorism, across more than 100,000 transactions.”

Binance allowed Hamas’s military wing al-Qassam Brigades, Palestinian Islamic Jihad, the Islamic State of Iraq and Syria (ISIS), al Qaeda and other criminals and money launderers to conduct transactions, according to the U.S. Treasury.

Richard Teng, Binance's global head of regional markets, will replace Zhao in the role.

"Richard is a highly qualified leader and, with over three decades of financial services and regulatory experience, he will navigate the company through its next period of growth," Zhao wrote on X, adding later he is "confident that the best days" are ahead for Binance and crypto industry.

The judge set Zhao's sentencing for Feb. 23, though this could be delayed, according to the AP. He faces a guideline sentence range of up to 18 months.

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