The Commodity Futures Trading Commission (CFTC) has reportedly charged Adam Todd, the founder of the cryptocurrency exchange Digitex, with running an illegal crypto derivatives trading platform, failing to implement required know-your-customer (KYC) practices and attempting to manipulate the price of Digitex’s native token called DGTX.
The complaint was filed in the Southern District of Florida Friday (Sept. 30), CoinDesk reported Friday.
In the complaint, Todd is accused of running the illegal trading platform through the corporate entities Digitex LLC, Digitex Ltd., Digitex Software Ltd. and Blockster Holdings Ltd. Corp., according to the report.
“The CFTC is seeking civil monetary penalties, disgorgement, restitution, and trading and registration bans against Todd and the Digitex-related entities,” the report said.
PYMNTS has reached out to both the CFTC and Blockster — a company to which there is a link on Todd’s LinkedIn page — for comment. The Digitex website was down as this article was being written.
As PYMNTS reported Wednesday (Sept. 28), CFTC has already pursued a pair of lawsuits that could upend the decentralized finance (DeFi) industry as we know it.
Read more: CFTC Lawsuit Aims to Rein in DeFi
In one, DeFi exchange developers bZeroX and its founders agreed to a $250,000 settlement for failing to register as Futures Commission Merchants (FCM) or enforce Bank Secrecy Act KYC regulations.
In the other, CFTC announced a lawsuit against the decentralized autonomous organization (DAO) that runs the Ooki, which offers crypto lending, borrowing and margin trading of crypto.
On Sept. 9, Securities and Exchange Commission (SEC) Chair Gary Gensler said during a speech that he supported giving more cryptocurrency oversight to the CFTC.
Read more: SEC Chair Gensler Backs Granting CFTC More Crypto Oversight
“To the extent the Commodity Futures Trading Commission (CFTC) needs greater authorities with which to oversee and regulate crypto non-security tokens and related intermediaries, I look forward to working with Congress to achieve that goal consistent with maintaining the regulation of crypto security tokens and related intermediaries at the SEC,” Gensler said.
