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Adam Colin Todd, the CEO of Digitex crypto futures exchange, allegedly neglected to implement a sufficient anti-money-laundering (AML) program, according to a Florida federal court.
The U.S. Attorney’s Office for the Southern District of Florida stated on Tuesday that the individual “willfully caused Digitex Futures to violate the Bank Secrecy Act.”
The statement also indicated that Todd failed to establish, execute, and uphold know-your-customer (KYC) regulations.
Todd previously faced charges from the Commodity Futures Trading Commission (CFTC) in 2022 for breaching the Commodity Exchange Act (CEA). The court accused Todd of utilizing various corporate entities – including Digitex LLC and Digitex Ltd. – to operate an unlawful crypto derivatives trading platform.
In July 2023, the federal court mandated Todd to pay nearly $16 million to settle the allegations. The CFTC claimed that Todd attempted to manipulate the price of Digitex’s native token, DGTX, through non-economic trading practices to artificially inflate its value.
This occurred because Todd and the Digitex platforms did not register with the U.S. CFTC as futures commission merchants. Nevertheless, Todd continues to work as a developer for Digitex Games, which employs the DGTX token.
Court’s Indictment Against Digitex
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The indictment issued on Tuesday highlighted that from January 2018 to April 2022, Todd sold unregistered futures contracts to customers of Digitex Futures. Furthermore, the failure to implement AML regulations constitutes a direct violation of the Bank Secrecy Act.
Previously, BitMEX CEO Arthur Hayes encountered similar charges for “willfully” neglecting to adhere to AML laws.
“The indictment further alleges that Todd publicly declared his refusal to implement know-your-customer policies for Digitex Futures.”
According to prosecutors, the absence of KYC requirements would enable the company to become a hub for illicit activities, including money laundering and evasion of sanctions.
The accused made an initial court appearance, as noted in the release. “If convicted, Todd faces up to five years in federal prison.”
Additionally, any sentence will be determined by a federal district court judge after evaluating the U.S. Sentencing Guidelines.
The post Digitex CEO Charged for Illegally Operating Crypto Futures appeared first on Cryptonews.
