Changpeng Zhao, the founder of Binance, the largest cryptocurrency exchange in the world, pleads guilty to money laundering violations

Changpeng Zhao, the founder of Binance, the largest cryptocurrency exchange in the world, has pleaded guilty to money laundering violations, according to federal authorities. Binance itself has pleaded guilty and agreed to pay $4.3 billion in fines and restitution.

As part of his guilty plea, Mr. Zhao has agreed to pay a $50 million fine and to step down from his role as the company’s chief executive. Mr. Zhao faces up to 18 months in prison under federal sentencing guidelines, but prosecutors are keeping open the possibility of asking for a stiffer penalty, according to senior Justice Department officials.

Mr. Zhao and a representative for Binance entered the guilty pleas in federal court in Seattle. In a statement, Binance said the agreement acknowledged “our company’s responsibility for historical, criminal compliance violations.” The company said Richard Teng, a top executive, would take over as chief executive, but that Mr. Zhao would remain “available for consultation on historical areas of our business.”

The actions against Binance and Mr. Zhao were announced at a news conference in Washington attended by Treasury Secretary Janet L. Yellen and Attorney General Merrick Garland.

Before the settlement, regulators had made moves this year to penalize Binance. In March, the C.F.T.C. filed a civil suit against the firm and Mr. Zhao, accusing them of violating financial rules designed to protect U.S. investors.

The S.E.C. charged Binance and Mr. Zhao with mishandling customer funds and lying to regulators. In its lawsuit against Binance, the S.E.C. said that the firm transferred billions of dollars in customer funds to a separate company, Merit Peak Limited, which was controlled by Mr. Zhao.