MIAMI, FL – The Commodity Futures Trading Commission (CFTC) has filed a complaint against Florida resident Adam Todd and four companies he controlled – Digitex LLC, Digitex Limited, Digitex Software Limited, and Blockster Holdings Limited Corporation. The lawsuit, filed in the U.S. District Court for the Southern District of Florida, alleges Todd and his entities operated an unregistered digital asset exchange called “Digitex Futures” and engaged in manipulative trading practices.
According to the CFTC, Todd and Digitex Futures illegally offered futures transactions without registering as a designated contract market. The complaint further alleges that Todd attempted to manipulate the price of DGTX, the native token of the Digitex Futures exchange, between May 2020 and August 2020. Digitex Futures required users to deposit DGTX to margin their trades.
The CFTC alleges Todd sought to artificially inflate the price of DGTX as reported on third-party exchanges, despite acknowledging it would result in trading losses. He allegedly deployed a trading “bot” designed to consistently buy more DGTX than it sold and filled large over-the-counter orders on external exchanges instead of utilizing the exchange’s holdings, all in an effort to “pump” the price. Todd reportedly believed a higher DGTX price would benefit the substantial amount of DGTX held by the Digitex “treasury.”
The agency is seeking full restitution, disgorgement of any ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA).
“The CFTC’s action against Adam Todd and Digitex Futures underscores the primacy of the CEA’s core registration provisions that are designed to ensure the structural integrity of our nation’s derivatives markets,” said Acting Director of Enforcement Gretchen Lowe. “Further, the CFTC will vigorously investigate potential manipulative trading activity to ensure confidence in markets remains strong.”
The CFTC noted the assistance of several international regulatory bodies in the investigation, including agencies from Australia, Ireland, Cyprus, Gibraltar, Seychelles, and St. Vincent & the Grenadines.
Source: CFTC.gov
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