Business News Report
February 14, 2024

Digitex Exchange CEO Accused of Illegally Operating Crypto Futures by US Federal Authorities

In Brief

Digitex CEO Adam Colin Todd was charged by US court for willfully neglecting to establish and implement an AML program for Digitex Futures.

Digitex Exchange CEO Faces Federal Charges for Illegally Operating Crypto Futures

Digitex Cryptocurrency Futures Exchange CEO, Adam Colin Todd faces charges in a Florida federal court for willfully causing Digitex Futures to violate the Bank Secrecy Act — by neglecting to establish and implement an anti-money-laundering (AML) program.

According to the allegations, from January 2018 to April 2022, Adam Colin Todd allegedly operated Digitex Futures as an unregistered futures commission merchant in the United States. Additionally, the CEO of Digitex is charged with a failure to establish, implement, and uphold know-your-customer (KYC) norms, publicly refusing to enforce such policies for the company.

​​The absence of KYC requirements could create an environment conducive to criminal activities such as money laundering and sanctions evasion within the company. The accused has made an initial appearance in court, and if found guilty, Adam Colin Todd could potentially face a sentence of up to five years in federal prison.

Cryptocurrency exchange and trading platform BitMEX‘s CEO, Arthur Hayes, has previously faced similar charges of “willfully” failing to comply with AML laws, including the failure to fulfill KYC obligations. Despite this, Arthur Hayes was released after posting a $10 million bail.

Commodity Exchange Act Violation 

The CEO of Digitex Futures previously faced charges from the Commodity Futures Trading Commission (CFTC) in 2022 for violating the Commodity Exchange Act (CEA). The court accused Adam Colin Todd of utilizing various corporate entities, including Digitex LLC and Digitex Ltd., to operate an illegal cryptocurrency derivatives trading platform. Subsequently, the court mandated the suspect to pay almost $16 million to settle accusations.

Moreover, after failing to register himself and Digitex with the United States CFTC as futures commission merchants, Adam Colin Todd attempted to manipulate Digitex’s native token, DGTX, through noneconomic trading to artificially inflate its price, according to the CFTC. However, despite all legal issues, Adam Colin Todd remains active as a developer of Digitex Games, which also employs the DGTX token.

Amid charges of violating financial regulations and engaging in unregistered activities, the legal proceedings against Adam Colin Todd highlight the imperative for vigilance in the cryptocurrency space. 

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

More articles
Alisa Davidson
Alisa Davidson

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

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