US authorities say CEO Changpeng Zhao pleaded guilty to breaking anti-money laundering laws.

Changpeng Zhao, founder of Binance, the world’s largest cryptocurrency exchange, has stepped down as CEO and pleaded guilty to violating anti-money laundering laws.

The deal with the United States Department of Justice (DoJ) is part of a larger settlement that involves several federal agencies and will include fees of more than $4bn, the DoJ said on Tuesday.

The announcement is the latest blow to the cryptocurrency industry, which has been marred by a series of scandals and investigations that have unearthed fraudulent behaviour by central players and firms.

Cryptocurrency has also comes under scrutiny as a tool used by illicit groups to circumvent global financial safeguards.

Zhao, a Canadian national, pleaded guilty to one count of failure to maintain an effective anti-money laundering programme.

“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 US history,” Attorney General Merrick Garland said.

This month, Sam Bankman-Fried, the 31-year-old founder of FTX, the world’s second-largest crypto exchange, was convicted of fraud for stealing more than $10bn from customers and investors.

“In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases. The message here should be clear: Using new technology to break the law does not make you a disruptor. It makes you a criminal,” Garland said.

Acting US Attorney Tessa Gorman for the western district of Washington said that because Zhao “knowingly operated a financial platform without basic anti-money laundering safeguards, the company caused illegal transactions between US users and users in sanctioned jurisdictions such as Iran, Cuba, Syria, and Russian-occupied regions of Ukraine – transactions for which Binance profited with significant fees”.

Prosecutors have said that as part of the settlement, Binance will pay fees of $1.81bn, a forfeiture of $2.5bn, and personal payments from Zhao of about $50m.

Zhao’s plea agreement also bars him from all involvement with Binance, a Cayman Islands limited liability company.

The founder has previously faced charges of diverting customer funds.

“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals and child abusers through its platform,” Treasury Secretary Janet Yellen said. “Any institution, wherever located, that wants to reap the benefits of the US financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries and crime or face the consequences.”