Washington DC - Binance chief executive Changpeng Zhao pleaded guilty Tuesday to money laundering violations, in a deal that will see the cryptocurrency exchange he founded pay over $4 billion in penalties.

"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 in a statement.

Binance's guilty plea is part of coordinated action including with the Treasury Department's Financial Crimes Enforcement Network and Office of Foreign Assets Control (OFAC), the Department of Justice said.

Zhao pleaded guilty to failing to maintain an effective anti-money laundering program, the Department of Justice said, and he has resigned from his position of CEO. Court documents showed he agreed to pay a $50 million fine as part of the plea.

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Binance's agreements with the Treasury Department's agencies include a civil money penalty of $3.4 billion and a $968 million penalty involving OFAC. These mark the agencies' largest settlements in history.

Treasury Secretary Janet Yellen said the penalties and a five-year monitorship imposed on Binance mark a "milestone for the virtual currency industry."

Binance's violations included its failure to prevent and report transactions with groups like the ISIS, and matching trades between US users and those in sanctioned jurisdictions like Iran and North Korea, the Treasury said.

Moving forward, Binance must file suspicious activity reports required by law, on top of reviewing past transactions to report such activity to authorities, Garland said.

Binance was created in 2017 and cornered much of the crypto-trading market, turning Zhao into a billionaire.

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The company runs crypto exchanges and provides other services across the world, but it has taken a severe hit since crypto markets collapsed and regulators began probing the legality of its business.

Zhao – often seen as the archrival of disgraced FTX founder Sam Bankman-Fried – is expected to face sentencing at a later time. He is barred from involvement in operating Binance's business for now and will be succeeded by former global head of regional markets Richard Teng.

"I made mistakes, and I must take responsibility," Zhang admitted.