“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 in a statement. Yellen said groups like Hamas’s Al-Qassam Brigades and ISIS had used Binance to conduct transactions.

Most of the alleged violations of sanctions programs involved Iran, according to a senior Treasury official.

The more than $1 trillion crypto market has long been dogged by accusations of fraud. But the Binance settlement — the penalties assessed by the authorities are the largest in history — marks the latest sign that the industry has entered a new age of law and order in the U.S. with more aggressive prosecutions.

“The result of these agreements will be an end to company behavior that has posed risks to the U.S. financial system, U.S. citizens, and our country’s national security for too long,” Yellen said. “And let me be clear: We are also sending a message to the virtual currency industry more broadly, today and for the future.”

Under the terms of the settlement, Binance will also enter into a monitorship and undertake new compliance efforts, including “to ensure Binance’s complete exit from the United States,” the Treasury Department said. The monitor — a first for the crypto market — will give Treasury access to Binance’s books and records for five years. The senior Treasury official compared it to the oversight structure imposed on banks following the global financial crisis.

Zhao faces a possible prison sentence of between 10 and 18 months, according to U.S. sentencing guidelines. The Justice Department has not taken a position on a sentencing recommendation.

Treasury officials declined to comment on what the settlement means for Binance.US — a separate, smaller crypto exchange owned by Zhao that is registered with FinCEN as a money services business.

In a blog post published shortly after the announcement, Binance said the settlement will enable it to “emerge as a stronger company as we lay the foundation for the next 50 years.” And while Zhao will no longer have a leadership role, he remains the company’s majority shareholder and “a resource available for consultation on historical areas of our business.”

Zhao admitted that he “made mistakes” and “must take responsibility” in a post on X, the social media platform formerly known as Twitter. He also said Richard Teng, the exchange’s former global head of regional markets, is taking over as CEO.

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

Launched in 2017, Zhao’s crypto empire amassed tremendous power by offering a cheap way to trade thousands of different tokens. The strategy paid huge dividends: Binance’s market share quickly outstripped its rivals and Zhao emerged as a leading — albeit mysterious — executive in the industry.

The company, however, has long sat in a category of its own for policymakers across Washington.

While the crypto industry has plenty of friends on Capitol Hill, Binance has drawn a rare degree of bipartisan concern. Both Democrats and Republicans — including some of the crypto industry’s top allies like Sen. Cynthia Lummis (R-Wyo.) and Rep. French Hill (R-Ark.) — have urged prosecutors to investigate and charge Binance over its alleged ties to illicit finance, including with groups like Hamas.

“The CEO of the world’s largest crypto exchange pleaded guilty to breaking anti-money laundering laws,” Sen. Elizabeth Warren (D-Mass.) said in a statement on X. “This is part of a larger trend of criminal activity in the crypto industry and sadly predictable.”

Warren, a top crypto critic, has been leading a bipartisan push in Congress to enact stricter anti-money laundering rules around the industry.

The U.S. accelerated efforts to rein in the crypto market over the last year following the downfall of Bankman-Fried’s FTX, the one-time chief rival of Binance and Zhao whose collapse shook Washington and Wall Street. Prosecutors have since gone after a number of major crypto executives on fraud charges, while regulators like the Gary Gensler-led Securities and Exchange Commission have nabbed several leading crypto companies including Gemini, Coinbase and, most recently, Kraken for allegedly skirting market rules.

The CFTC and SEC alleged earlier this year that Binance was, among other things, tapping into the American market without the authority to do so. The SEC’s case was not part of the settlements unveiled Tuesday.

In the CFTC’s complaint against the company, the Wall Street derivatives regulator also said a Binance employee received information about “Hamas transactions” in 2019. A year later, the same employee, former Binance Chief Compliance Officer Samuel Lim, allegedly wrote in a message about certain customers on the exchange: “Like come on. They are here for crime,” according to the CFTC.

“Binance’s activities undermined the foundation of safe and sound financial markets by intentionally avoiding basic, fundamental obligations that apply to exchanges, all the while collecting approximately $1.35 billion in trading fees from U.S. customers,” CFTC Chair Rostin Behnam said. “Binance and its leaders sought to dupe and indoctrinate their employees and customers, building a cult-like following premised on circumventing their own compliance controls to maximize corporate profits above all else.”

Still, progressive investor groups that have been sounding the alarm on crypto for years expressed concern following the news of Binance’s settlement. Public Citizen finance policy advocate Bartlett Naylor said justice will be served when wrongdoers spend time in prison.

Better Markets CEO Dennis Kelleher criticized the Justice Department for “letting Binance use its predatory if not criminal profits to buy its CEO and other executives get-out-of-jail free cards,” calling it “an indefensible double standard of justice.”

“Don’t be fooled. Even billion-dollar fines are meaningless to gigantic, global financial firms,” Kelleher said in a statement. “They are little more than a cost of doing business and the criminal business is booming because of policies that fail to prosecute individuals fully and properly.”