Key Takeaways
- The indictment states that the founder has publically refused to implement KYC policies for Digitex Futures.
- The indictment alleges that from January 2018 to April 2022, Todd sold unregistered futures contracts to customers of Digitex Futures
Adam Colin Todd, the CEO and founder of the cryptocurrency futures exchange Digitex, is embroiled in legal troubles as a Florida federal court accuses him of violating the Bank Secrecy Act. The charges stem from Todd’s alleged failure to establish an adequate anti-money laundering (AML) program within Digitex Futures, as outlined by the US Attorney’s Office for the Southern District of Florida.
According to the office’s statement released on Tuesday, Todd deliberately caused Digitex Futures to breach the Bank Secrecy Act by neglecting to implement sufficient know-your-customer (KYC) norms. This failure to implement robust AML measures potentially exposed the exchange to exploitation by individuals engaging in illicit financial activities.
Todd’s legal issues are not new. In 2022, he faced charges from the Commodity Futures Trading Commission (CFTC) for violating the Commodity Exchange Act (CEA). The court accused Todd of operating an illegal crypto derivatives trading platform through various corporate entities, including Digitex LLC and Digitex Ltd.
The situation escalated in July 2023 when a federal court ordered Todd to pay nearly $16 million to settle accusations of manipulating Digitex’s native token, DGTX, through questionable trading practices. Despite these legal setbacks, Todd remains active as a developer of Digitex Games, which utilizes the DGTX token.
The latest indictment alleges that from January 2018 to April 2022, Todd sold unregistered futures contracts to customers of Digitex Futures, further exacerbating the regulatory violations. This failure to adhere to AML rules represents a direct breach of the Bank Secrecy Act, raising concerns about the exchange’s susceptibility to financial crimes.
One notable aspect of the case is Todd’s public refusal to implement KYC policies for Digitex Futures, a move that could have potentially mitigated illicit activities on the platform. If convicted, Todd could face a maximum sentence of up to five years in federal prison, pending the decision of a federal district court judge.
This recent indictment adds to Todd’s legal woes, including previous legal action for failing to register Digitex with the CFTC and manipulating the price of the DGTX token.
