How the CEO of This Crypto Exchange Violated US Law

9 months ago 2

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Adam Colin Todd, the CEO of the Digitex Futures Exchange (Digitex Futures), faces serious charges for his alleged violation of United States law. Consequently, the federal court in Miami charged Todd with willfully neglecting to establish an anti-money-laundering (AML) program in compliance with the Bank Secrecy Act (BSA).

The BSA mandates that financial institutions, including cryptocurrency exchanges like Digitex Futures, maintain rigorous records and report certain transactions to the Financial Crimes Enforcement Network (FinCEN). This is crucial in preventing illicit activities such as money laundering and terrorism financing.

The allegations against Todd, however, outline a stark deviation from these essential legal requirements.

Digitex Crypto Exchange CEO May Face Up to Five Years in Prison

Todd is accused of operating Digitex Futures, an online futures exchange, from January 2018 to April 2022 without registering as a futures commission merchant in the US.

“Todd sold and offered futures contracts to Digitex Futures’ customers. He willfully failed to establish, implement, and maintain an adequate anti-money-laundering program, including an adequate know-your-customer (KYC) program.” FBI Miami alleged

The CEO of the crypto exchange allegedly defied regulatory standards by publicly refusing to adopt KYC policies for Digitex Futures. Consequently, this action has now brought him to federal court. If found guilty, Todd could face up to five years in federal prison. The final sentence will be decided by a federal judge, considering legal guidelines and factors.

Todd Talks About No KYC Requirement on Digitex Futures

US Attorney Markenzy Lapointe has spearheaded this case for the Southern District of Florida and Jeffrey B. Veltri, the Special Agent in Charge of the FBI’s Miami Field Office. The prosecution falls under the vigilant watch of Assistant US Attorney Trevor Jones.

Adding to Todd’s legal woes, in July 2023, the Commodity Futures Trading Commission (CFTC) fined him $15 million for multiple violations. These include price manipulation of Digitex Futures’ native token, DGTX, and unauthorized offerings of futures transactions.

The court’s order elucidated the failure of Todd and his entities to adhere to regulatory standards. Consequently, the CFTC banned Todd and his companies from trading on CFTC-regulated markets. Additionally, the regulator prohibited him from any future registrations.