Bermuda’s fintech future suffered another setback with Bermuda-linked Binance agreeing to pay fines totalling $4.3 billion after the crypto exchange admitted wrongdoing in a Seattle federal court on Tuesday.

Zhao Changpeng, founder and chief executive of Binance, is stepping down and pleading guilty to violating criminal US anti-money-laundering requirements and paying a $50 million fine, Bloomberg News has reported.

The plea deal secured with the Department of Justice may preserve the company’s ability to continue operating.

But Binance still faces allegations from the Securities and Exchange Commission, which charged the company, affiliate BAM Trading Services Inc and Zhao with a variety of securities law violations.

Binance was the promise of much significance to Bermuda, especially after the signing of a memorandum of understanding by Zhao and David Burt, the Premier, to the applause of his cabinet colleagues during a Cabinet Office press conference in April 2018.

Mr Burt hailed the event as progress on his government’s promise "to usher in an era of business development that, at its core, would diversify the Bermuda economy“.

He said Binance planned to “develop a global compliance base here in Bermuda” that would create 40 jobs, at least 30 of them Bermudian, and spend up to $10 million on training for Bermudians in blockchain technology development.

Binance was also to make up to $5 million available for investment in new Bermudian blockchain business.

Mr Burt said the deal was “a vote of confidence in Bermuda and the leadership of this government”.

He added: “Through the Binance Charity Foundation, the group is committed to improving education, creating awareness in the development through the use of blockchain technology. Binance Labs are incubators to encourage greater innovation and scope for future investment in a variety of projects.”

This week, The Wall Street Journal said Zhao, who owns Binance, has agreed to pay the $4.3 billion in penalties in a deal that will end a long-running investigation.

The publication said executives had recently fled Binance and the exchange had laid off a large number of its employees this year as the company struggled to come to terms with the US probes.

The deal would allow Zhao to retain his majority ownership of Binance, although he will not be able to have an executive role at the company.

The Journal had previously reported that the DOJ’s investigation had sought to determine the adequacy of Binance’s anti-money laundering programme and see if it allowed individuals in sanctioned countries, such as Iran and Russia, to trade with Americans on the exchange.

Meanwhile, separately and not yet resolved, the SEC had alleged in June that Binance violated US investor-protection laws.

SEC chair Gary Gensler said at the time: “Through 13 charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure and calculated evasion of the law.

“As alleged, Zhao and Binance misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform, the manipulative trading of its affiliated market maker, and even where and with whom investor funds and crypto assets were custodied.

“They attempted to evade US securities laws by announcing sham controls that they disregarded behind the scenes so that they could keep high-value US customers on their platforms.

“The public should beware of investing any of their hard-earned assets with, or on, these unlawful platforms.”