The United States Commodity Futures Trading Commission, filed a complaint against Digitex LLC and its founder and CEO Adam Todd for failing to register the cryptocurrency futures exchange and manipulating the price of its DGTX token.
According to a court filing in the Southern District of Florida, Todd allegedly pumped up the price of DGTX tokens in an effort to inflate Digitex’s holdings. The U.S. regulator claimed the Digitex CEO used different corporate entities as part of a scheme to launch and operate an illegal digital asset derivatives trading platform, in violation of the Commodity Exchange Act.
CFTC rules require performing Know Your Customer (KYC) checks and implementing a customer information program. Todd said in 2020 that he planned to remove all KYC procedures from Digitex in an effort to protect user data.
The complaint said the CFTC sought a court order blocking Todd and Digitex from engaging in digital asset transactions considered commodities under the regulator’s purview. In addition, the regulator intended for Digitex to pay civil monetary penalties, disgorgement, and restitution to the affected parties. At the time of publication, both Digitex’s and its futures websites were offline.
