The CTFC accused Todd of employing a number of company organizations, including Digitex LLC, Digitex Ltd., Digitex Software Ltd., and Blockster Holdings Ltd., in its complaint, which was filed with the commission and made public on Friday in the Southern District of Florida. Corp., - to operate a fraudulent cryptocurrency derivatives trading business.
Conforming to the watchdog, Digitex Futures Exchange fulfilled the requirements for a certified contract market or international board of trade but did not register as a futures commission merchant with the CTFC, infringing CEA regulations.
In breach of the Bank Secrecy Act, which carries a maximum five-year prison sentence for offenders, the CTFC charged Todd and the entities with failing to implement sufficient know-your-customer checks and a customer information program.
The CTFC further claims Todd tried to use noneconomic trading to “push” the price of DGTX, the native token of the exchange, higher. The regulator asserted that Todd bought tokens with the intention of artificially expanding the exchange's holdings by driving up the price of the token rather than buying them with the intention of profiting from the individual trades.
According to the regulator's filing, “Defendants are likely to continue to engage in the acts and practices described in this complaint and comparable acts and practices, without restraint and enjoinment by this Court.”
On behalf of the participants who were misled, the CFTC is requesting full compensation in addition to disgorgement, civil financial fines, trading and registration prohibitions against Todd and the Digitex-affiliated organizations.
The enforcement action by the agency is the most current in a string of recent cases the watchdog has filed in connection with cryptocurrencies. These lawsuits seem to be part of a continuing regulatory onslaught on rulebreakers in the trading systems for cryptocurrencies and other digital assets.
Digitex, a cryptocurrency futures exchange, and Adam Todd, its creator and CEO, have been accused by the US Commodity Futures Trading Commission (CTFC) of many violations of the Commodity Exchange Act (CEA).
As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!
iOS: t.ly/UUCj
Android: t.ly/cfYt