Digitex Futures Exchange Founder Guilty of Anti-Money Laundering FailuresAdam Todd has pleaded guilty to failing to establish an Anti-Money Laundering (AML) program, a requirement under the Bank Secrecy Act.
This plea was made in the federal court of the Southern District of Florida, as communicated by the U.S. Attorney’s Office on May 7. Todd is charged with allowing Digitex to offer an unregistered futures trading platform to U.S. customers from 2018 to 2022 without implementing AML and Know Your Customer (KYC) protocols.
The announcement by the U.S. Attorney reads: “From 2018 through April 2022, Adam Colin Todd, 50, illegally operated Digitex Futures, an online futures exchange company, as an unregistered futures commission merchant within the United States. Todd, as CEO of Digitex Futures, illegally sold and offered futures contracts to Digitex Futures customers in the United States.”
Legal Consequences and Charges
According to the U.S. Attorney’s Office, Todd might face five years in prison or a fine of $250,000. However, his sentencing date has yet to be disclosed.
In April, Changpeng Zhao, the former CEO of Binance, was also convicted of the same offenses and sentenced to four months in prison.
Adam Todd left his position as CEO of Digitex in October 2022 and has worked in the sector as the chief developer for Digitex Games since Feb 2023. In 2020, after a huge data leakage at Digitex that uncovered confidential user data, Todd declared the discontinuation of all KYC checks. This choice was made in spite of the platform’s earlier assertions that U.S. IPs were blocked and that users would have to confirm that they were not located in the United States.
Apart from the criminal charges, Todd and Digitex faced civil litigation by the U.S. Commodity Futures Trading Commission (CFTC). In 2022, the CFTC filed a lawsuit against Todd and Digitex, and in 2023, a court ruling was made against them, ordering them to pay $16 million in penalties and disgorgement for failing to comply with U.S. laws.
