Digitex Futures Founder Hits With Default Judgment By CFTC For Illegal Activities
Key Points:
- CFTC obtained a default judgment against Adam Todd and his companies for operating an illegal digital asset exchange Digitex Futures.
- Todd and his companies attempted to manipulate the price of the native token DGTX and offered futures transactions without proper registration.
- The judgment bans Todd and his companies from trading in CFTC-regulated markets and imposes significant penalties.
In a recent development, the U.S. District Court for the Southern District of Florida has issued a default judgment against Florida resident Adam Todd and his affiliated companies – Digitex LLC, Digitex Limited, Digitex Software Limited, and Blockster Holdings Limited Corporation.
The judgment comes as a result of their involvement in illegal activities related to their digital asset exchange, operating under the name “Digitex Futures.”
The court ruling states that Todd and his companies attempted to manipulate the price of their native token, DGTX, engaged in illegal futures transactions, failed to register with the Commodity Futures Trading Commission (CFTC) and neglected to implement essential compliance measures such as a customer information program, know your customer policies, and anti-money laundering procedures.
As a result, the court has permanently enjoined Todd and his companies from trading in any CFTC-regulated markets and from registering with the CFTC. Additionally, Todd has been ordered to pay $3,912,220 in disgorgement and a civil monetary penalty of $11,736,660. This judgment effectively resolves the CFTC’s enforcement action against Todd and Digitex Futures.
Ian McGinley, the Director of the CFTC’s Division of Enforcement, highlighted the importance of the ruling, stating:
“This order resolves yet another action against an individual and digital asset exchange illegally offering futures contracts to U.S. customers. The order finds that Todd attempted to manipulate Digitex’s native utility token, DGTX, by allegedly ‘pumping’ the token’s price through the use of a computerized bot. 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.”
The case against Todd and Digitex Futures originated from a complaint filed by the CFTC on September 30, 2022. The complaint alleged that between May 2020 and May 2022, Todd and his company operated a digital asset derivatives exchange from Florida, targeting U.S. customers despite being subject to U.S. regulation.
The CFTC charged Todd with attempting to manipulate DGTX, the native token of the Digitex Futures exchange. Todd’s alleged actions included artificially inflating the price of DGTX through the use of a bot and engaging in large over-the-counter purchases from third-party exchanges. These manipulative practices were intended to boost the price of DGTX, benefiting the Digitex “treasury” despite the potential trading losses incurred.
The court’s judgment affirms the CFTC’s claims of attempted manipulation and other charges related to the interstate commerce of commodities.
While the CFTC cautions that victims may not recover their lost funds due to insufficient assets held by wrongdoers, it remains committed to protecting customers and holding wrongdoers accountable for their actions.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Digitex Futures Founder Hits With Default Judgment By CFTC For Illegal Activities
Key Points:
- CFTC obtained a default judgment against Adam Todd and his companies for operating an illegal digital asset exchange Digitex Futures.
- Todd and his companies attempted to manipulate the price of the native token DGTX and offered futures transactions without proper registration.
- The judgment bans Todd and his companies from trading in CFTC-regulated markets and imposes significant penalties.
In a recent development, the U.S. District Court for the Southern District of Florida has issued a default judgment against Florida resident Adam Todd and his affiliated companies – Digitex LLC, Digitex Limited, Digitex Software Limited, and Blockster Holdings Limited Corporation.
The judgment comes as a result of their involvement in illegal activities related to their digital asset exchange, operating under the name “Digitex Futures.”
The court ruling states that Todd and his companies attempted to manipulate the price of their native token, DGTX, engaged in illegal futures transactions, failed to register with the Commodity Futures Trading Commission (CFTC) and neglected to implement essential compliance measures such as a customer information program, know your customer policies, and anti-money laundering procedures.
As a result, the court has permanently enjoined Todd and his companies from trading in any CFTC-regulated markets and from registering with the CFTC. Additionally, Todd has been ordered to pay $3,912,220 in disgorgement and a civil monetary penalty of $11,736,660. This judgment effectively resolves the CFTC’s enforcement action against Todd and Digitex Futures.
Ian McGinley, the Director of the CFTC’s Division of Enforcement, highlighted the importance of the ruling, stating:
“This order resolves yet another action against an individual and digital asset exchange illegally offering futures contracts to U.S. customers. The order finds that Todd attempted to manipulate Digitex’s native utility token, DGTX, by allegedly ‘pumping’ the token’s price through the use of a computerized bot. 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.”
The case against Todd and Digitex Futures originated from a complaint filed by the CFTC on September 30, 2022. The complaint alleged that between May 2020 and May 2022, Todd and his company operated a digital asset derivatives exchange from Florida, targeting U.S. customers despite being subject to U.S. regulation.
The CFTC charged Todd with attempting to manipulate DGTX, the native token of the Digitex Futures exchange. Todd’s alleged actions included artificially inflating the price of DGTX through the use of a bot and engaging in large over-the-counter purchases from third-party exchanges. These manipulative practices were intended to boost the price of DGTX, benefiting the Digitex “treasury” despite the potential trading losses incurred.
The court’s judgment affirms the CFTC’s claims of attempted manipulation and other charges related to the interstate commerce of commodities.
While the CFTC cautions that victims may not recover their lost funds due to insufficient assets held by wrongdoers, it remains committed to protecting customers and holding wrongdoers accountable for their actions.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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