A Florida man and the companies he controlled have been slapped with a hefty penalty for illegally operating a digital asset exchange and attempting to manipulate the price of its native token. On July 5, Judge Roy K. Altman of the U.S. District Court for the Southern District of Florida issued a default judgment against Adam Todd and four entities he oversaw: Digitex LLC, Digitex Limited, Digitex Software Limited, and Blockster Holdings Limited Corporation.
Todd and his companies operated “Digitex Futures,” a digital asset exchange. The CFTC alleged that Todd attempted to manipulate the price of DGTX, the exchange’s native token, which is considered a commodity in interstate commerce. The complaint further accused him of illegally offering futures transactions outside of a designated contract market, failing to register with the Commodity Futures Trading Commission (CFTC), and neglecting to implement essential customer verification and anti-money laundering protocols.
The court order permanently bans Todd and his companies from trading on CFTC-regulated markets and from registering with the agency. Furthermore, Todd is required to pay $3,912,220 in disgorgement—funds obtained through illegal means—and a $11,736,660 civil monetary penalty, totaling over $15.6 million. This judgment resolves the CFTC’s enforcement action initiated in September 2022.
According to the CFTC, between May 2020 and May 2022, Todd operated the digital asset derivatives exchange from Florida, actively soliciting U.S. customers despite knowing it subjected his business to U.S. regulation. The agency alleges Todd attempted to artificially inflate the price of DGTX during the summer of 2020 by deploying a trading “bot” designed to consistently buy more DGTX than it sold. He also allegedly filled large over-the-counter orders on third-party exchanges instead of drawing from the exchange’s own reserves.
“This order resolves yet another action against an individual and digital asset exchange illegally offering futures contracts to U.S. customers,” stated Ian McGinley, Director of the CFTC’s Division of Enforcement. “This case demonstrates that 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.”
Source: CFTC.gov
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