Digitex crypto futures exchange CEO Adam Colin Todd willfully failed to include adequate anti-money-laundering (AML) program, Florida federal court alleged.
The US Attorney’s Office for the Southern District of Florida said in a statement Tuesday that the offender “willfully caused Digitex Futures to violate the Bank Secrecy Act.”
Todd also failed to establish, implement and maintain know-your-customer (KYC) norms, the statement added.
Todd already faced charges from the Commodity Futures Trading Commission (CFTC) in 2022, for violating the Commodity Exchange Act (CEA). The court accused Todd of using various corporate entities – including Digitex LLC and Digitex Ltd. – to run illegal crypto derivatives trading platform.
Later in July 2023, the federal court ordered Todd to pay almost $16 million to resolve accusations. CFTC accused Todd’s attempt to manipulate Digitex’s native token, DGTX, using noneconomic trading to “pump” the price higher.
This is because, Todd and the Digitex platforms did not register with the US CFTC as futures commission merchants. However, Todd is still active as a developer of Digitex Games, which utilizes the DGTX token.
Court’s Indictment Against Digitex
The Tuesday indictment stressed that from January 2018 through April 2022, Todd sold unregistered futures contracts to Digitex Futures’ customers. Additionally, failing to implement AML rules is in direct violations of the Bank Secrecy Act.
Previously, BitMEX CEO Arthur Hayes faced similar charges for “willfully” failing to comply with AML laws.
“The indictment further alleges that Todd publicly stated that he refused to implement know-your-customer policies for Digitex Futures.”
Per prosecutors, the lack of KYC requirements would allow the company to thrive as a hotbed for criminal activity, including money laundering and sanctions evasion.
The accused made initial appearance in the court, the release added. “If convicted, Todd faces up to five years in federal prison.”
Further, any sentence will be determined by a federal district court judge after considering the U.S. Sentencing Guidelines.