CFTC takes legal action against Digitex futures exchange and CEO

CFTC takes legal action against Digitex futures exchange and CEO

The United States Commodity Futures Trading Commission (or CFTC) filed a complaint against Digitex LLC, its founder and CEO Adam Todd, for failing to register the cryptocurrency exchange and manipulating its DGTX token price.

A Sept. 30 court filing by the Southern District of Florida claims that Todd allegedly raised the price of DGTX tokens to increase Digitex’s holdings. According to the U.S. regulator, the Digitex CEO was accused of using different corporate entities in a scheme to launch an illegal digital asset derivatives trading platform. This is in violation of The Commodity Exchange Act.

CFTC regulations require rKnow Your Customers checks to be performed and a customer information program to be implemented. Todd stated in 2020 that he would remove all KYC procedures form Digitex to protect user data.

According to the complaint, the CFTC requested a court order prohibiting Todd and Digitex’s participation in digital asset transactions that are commodities within its purview. The regulator also wanted Digitex to pay civil penalties, disgorgement and restitution to the affected parties. Both Digitex’s futures websites and Digitex’s were offline at the time of publication.

Related: SEC claims fintech and market maker firms manipulate crypto market in token scheme

Many people in the crypto industry have criticized the CFTC and Securities and Exchange Commission for adopting a “regulation-by-enforcement” approach to crypto in America. The SEC is currently pursuing a legal battle with Ripple over whether Ripple’s XRP sales were in violation of securities laws. However, Caroline Pham, CFTC commissioner, met with Ripple CEO Brad Garlinghouse in September as part of a “learning trip” on blockchain and crypto.

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