CFTC claims Digitex failed to register with the agency, while Todd was allegedly involved in DGTX price manipulation.
Adam Todd, the CEO of Digitex, has been slapped with a hefty $16 million penalty, following a US federal court's ruling related to a Commodity Futures Trading Commission (CFTC) case.
According to a July 12th statement by the CFTC, a judge in the US District Court for the Southern District of Florida published a default judgment against Adam Todd and several companies under his control, including Digitex Limited, Digitex LLC, Digitex Software Limited, and Blockster Holdings Limited Corporation.
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It is worth noting that legal actions were launched in September 2022, citing the firm's failure to register with the CFTC and its involvement in the DGTX token price manipulation.
Todd and the four implicated companies have been ordered to release $3,912,220 in illicit gains and to pay an additional civil monetary penalty of $11,736,660. Along with the significant financial repercussions, entities have been barred from participating in any market regulated by the CFTC.
Ian McGinley, the enforcement director at the CFTC, stated that the regulatory authority would persist in its proactive efforts to ensure lawful registration and combat commodity manipulation.
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.
McGinley pointed out that Todd allegedly employed a computerized bot to inflate the price of DGTX. This bot was operational on third-party exchanges in 2020, and it was configured to purchase more tokens than it sold.
The CFTC, in conjunction with the US Securities and Exchange Commission, is presently engaged in multiple legal battles with cryptocurrency firms and their executives over regulatory non-compliance. High-profile cases include allegations against the crypto exchange Binance and civil charges leveled against Sam Bankman-Fried, the former CEO of FTX.
The federal court's decision highlights the unwavering commitment of regulatory bodies to uphold the law, emphasizing the need for cryptocurrency entities to adhere to regulatory guidelines or face substantial penalties.
