The CEO of Digitex, a crypto futures exchange, Adam Colin Todd, is accused by a Florida federal court of not having a proper anti-money-laundering (AML) program. On Tuesday, the U.S. Attorney’s Office for the Southern District of Florida announced that Todd deliberately caused Digitex Futures to break the Bank Secrecy Act by not setting up or following know-your-customer (KYC) rules.
Todd was previously charged by the Commodity Futures Trading Commission (CFTC) in 2022 for breaking the Commodity Exchange Act (CEA). The court claimed that Todd used companies like Digitex LLC and Digitex Ltd to operate an illegal crypto derivatives trading platform.
In July 2023, Todd was ordered by the court to pay nearly $16 million to settle claims. The CFTC accused him of trying to manipulate the price of Digitex’s native token, DGTX, by trading in ways that didn’t make economic sense to increase its price.
They violated the law because Todd and the Digitex platforms didn’t register with the U.S. CFTC as futures commission merchants. Despite this, Todd is still working as a developer for Digitex Games, which uses the DGTX token.
The indictment from Tuesday emphasizes that Todd sold futures contracts that weren’t registered to customers of Digitex Futures from January 2018 to April 2022, and not having AML policies directly breaks the Bank Secrecy Act.
This case is similar to a previous one involving BitMEX CEO Arthur Hayes, who was also charged for not adhering to AML laws.
Prosecutors say Todd openly refused to set up KYC policies for Digitex Futures, which could quickly turn the company into a place where illegal activities like money laundering and evading sanctions could happen.
Todd has already appeared in court, and if found guilty, he could face up to five years in prison. The final sentence will be decided by a judge, considering the U.S. Sentencing Guidelines.
