The CEO of Digitex, 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).
In a recent announcement on June 12, the CFTC stated that a judge in the U.S. District Court for the Southern District of Florida issued a default judgment against Todd and several affiliated companies, namely Digitex LLC, Digitex Limited, Digitex Software Limited, and Blockster Holdings Limited Corporation.
The judgment was made due to their failure to register with the CFTC and their involvement in manipulating the price of the DGTX token.
As part of the judgment, Todd and the four companies are prohibited from participating in any CFTC-regulated markets.
Additionally, they are required to pay $3,912,220 in disgorgement and a civil monetary penalty amounting to $11,736,660.
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Ian McGinley, the enforcement director of the CFTC, emphasized the commitment of the organization to ensuring the lawful registration of entities and addressing the manipulation of commodities in interstate commerce.
He stated, “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 McGinley, Todd allegedly employed a computerized bot to artificially inflate the price of DGTX. In 2020, Todd deployed this bot on third-party exchanges, resulting in the purchase of a larger quantity of the token than what was sold.
The charges against Todd and Digitex were filed by the commission in September 2022.
It is important to note that the $16 million order and any additional financial penalties imposed may not necessarily lead to repayment to Digitex users.
The CFTC, along with the U.S. Securities and Exchange Commission (SEC), is currently engaged in multiple civil suits against cryptocurrency firms and their executives for failing to comply with regulatory guidelines.
Among these cases are allegations against Binance, a popular cryptocurrency exchange, and civil charges against Sam Bankman-Fried, the former CEO of FTX.
The regulatory bodies are actively working to enforce compliance and maintain integrity in the crypto industry.
