Adam Colin Todd, the CEO of Digitex Futures Exchange (DGTX), is facing federal charges for alleged compliance failures, including violating the Bank Secrecy Act, according to an announcement by the US Department of Justice (DOJ).
The charges stem from Todd’s purported failure to establish and implement an anti-money laundering (AML) program at Digitex Futures.
Digitex Futures Exchange CEO Faces Federal Charges
The indictment alleges that from January 2018 to April 2022, Todd operated Digitex Futures, an online futures exchange company, as an unregistered futures commission merchant in the United States.
It is claimed by the US federal agency that Todd “willfully” neglected to establish an adequate anti-money laundering program, including a robust know-your-customer (KYC) program, despite publicly stating his refusal to implement KYC policies for the exchange.
According to the DOJ’s statement, Todd has made his initial appearance in federal court and, if convicted, could face up to five years in federal prison. The final sentence, if applicable, will be determined by a federal district court judge, taking into account various factors, including the US Sentencing Guidelines.
Regulatory Breaches
Todd has previously faced legal action by the United States Commodity Futures Trading Commission (CFTC), resulting in a default judgment. The CFTC’s judgment ordered Todd to pay approximately $16 million in disgorgement and penalties. The CFTC’s complaint accused Todd and his companies of attempting to manipulate the price of the exchange’s native token, DGTX.
The CFTC alleged that Todd employed a computerized bot to “artificially inflate” the token’s price, engaging in a practice known as “pumping.”
Additionally, Todd was accused of conducting over-the-counter (OTC) orders to boost DGTX’s price and violating various regulatory requirements, such as offering futures transactions on a non-designated contract market and failing to implement necessary customer information, know-your-customer policies, and anti-money laundering procedures.
The CFTC’s Ian McGinley, Director of Enforcement Division, said:
This case demonstrates that regardless of the technology used, the CFTC will aggressively use its well-established authority to ensure entities are lawfully registered and to address the manipulation of commodities in interstate commerce.
According to data from CoinMarketCap, Digitex’s native token, DGTX, is currently trading at $0.00003467. This represents a substantial decrease of over 26% within 24 hours.
As observed in the monthly chart, investors in DGTX have experienced significant price volatility in recent months due to the company’s CEO’s alleged compliance failures. These compliance issues have notably impacted the token’s market performance.
Featured image from Shutterstock, chart from TradingView.com
Source: https://bitcoinist.com/digitex-futures-exchange-ceo-faces-criminal-charges/