The Commodity Futures Trading Commission (CFTC) announced that a U.S. District Court issued a default judgment against a Florida resident and his four companies. The Florida court has injuncted Adam Todd and entities that operated the crypto exchange Digitex Futures.
The accused was fined $15 million for multiple CFTC violations.
Violations of the Commodity Exchange Act
The statement by the commodities regulator reveals that Adam Todd and his companies engaged in unlawful activities. It includes accusations of price manipulation of the Digitex Futures native token DGTX.
The platform also reportedly offered futures transactions on a platform not authorized as a designated contract market.
Additionally, the order stated that the entities failed to register with the CFTC. They were also asked why they did not implement necessary customer information, know-your-customer (KYC) policies, and anti-money laundering procedures.
Due to their actions, the court has permanently enjoined Todd and his companies from trading in any CFTC-regulated markets. They also can’t register with the agency in the future.
They must pay over $15 million, including a disgorgement of $3.9 million and a civil monetary penalty of $11.7 million.
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CFTC Crypto Rules Aim to Safeguard Investors
Division of Enforcement Director Ian McGinley highlighted the significance of this order. The official noted,
“The order finds that Todd attempted to manipulate Digitex’s native utility token, DGTX, by allegedly ‘pumping’ the token’s price through the use of a computerized bot.”
The court order results from a complaint filed by the CFTC on September 30, 2022.
McGinley emphasized that CFTC presses on compliance and addressing manipulation in commodity markets, even in the context of emerging digital assets.
CFTC came after Todd and Digitex Futures after seeking participation from US customers through online solicitations.
US Agencies Getting More Strict
Recently, government agencies, including the CFTC, have emphasized the need for enhanced cybersecurity measures to tackle the increasing threat of cyber hackers.
Meanwhile, the CFTC has appointed Scott Lee, a pro-crypto expert, as senior counsel and policy advisor, signaling its recognition of a digital assets framework.
Despite his positive stance, the CFTC will actively combat instances of violations. In recent months, the agency has intensified its efforts to address this issue.
Just last week, the CFTC filed a lawsuit against Justby International Auctions, accusing the company of operating a romance scam that defrauded customers of more than $1.3 million.
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