CFTC Successfully Resolves Case Against Digitex Futures Exchange and CEO, Securing $16 Million Court Order

In a significant development, the CEO of Digitex Futures Exchange, Adam Todd, has been ordered by a United States federal court to pay approximately $16 million in disgorgement and penalties as a result of a case brought by the Commodity Futures Trading Commission (CFTC).

The CFTC announced on June 12 that a judge in the U.S. District Court for the Southern District of Florida issued a default judgment against Todd, as well as Digitex LLC, Digitex Limited, Digitex Software Limited, and Blockster Holdings Limited Corporation. The judgment was rendered due to their failure to register with the CFTC and their alleged manipulation of the price of the DGTX token. As part of the court order, Todd and the four affiliated companies are prohibited from trading in any CFTC-regulated markets. Additionally, they are required to pay $3,912,220 in disgorgement and a civil monetary penalty of $11,736,660.

CFTC enforcement director Ian McGinley emphasized the agency’s commitment to ensuring compliance and addressing market manipulation, stating, “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.”

According to the CFTC, Todd allegedly employed a computerized bot to artificially inflate the price of DGTX. This bot was deployed on third-party exchanges in 2020, leading to a higher volume of token purchases compared to sales. The CFTC filed charges against Todd and Digitex in September 2022. It is important to note that the $16 million court order, along with potential additional financial penalties, may not necessarily result in restitution for affected Digitex users.

The CFTC, alongside the U.S. Securities and Exchange Commission, is actively engaged in multiple civil suits involving cryptocurrency firms and their executives who have allegedly failed to comply with regulatory guidelines. These ongoing cases include allegations against prominent crypto exchange Binance and civil charges against former FTX CEO Sam Bankman-Fried.

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