Digitex Futures Founder Adam Todd Faces Federal Charges for Violating Bank Secrecy Act
Summary:
Adam Colin Todd, the founder of Digitex Futures exchange, faces U.S. federal court charges for infringing on the Bank Secrecy Act. He's accused of failing to establish a necessary anti-money laundering program, which opened the platform to potential misuse by criminals engaged in money laundering. Todd underwent initial court proceedings and, if found guilty, could face up to five years imprisonment. Previously, Todd was fined $16 million for not registering the futures exchange with the U.S. Commodity Futures Trading Commission.
Adam Colin Todd, the brains behind the Digitex Futures exchange, is facing charges in a U.S. federal court. Todd is accused of infringing on the Bank Secrecy Act due to not putting an anti-money laundering protocol in place. The Bank Secrecy Act is seen as a crucial mechanism in thwarting financial crimes. An AML protocol is a crucial part of adhering to the act, requiring financial firms to document certain transactions and report them to the Financial Crimes Enforcement Network (FinCEN).
The Southern District of Florida's U.S. Attorney's Office went public with these accusations on February 12. The FBI Miami branch is managing the investigation, with U.S. Assistant Attorney Trevor Jones serving in the prosecutorial role. It's alleged that Todd's failure to establish an AML system left the platform vulnerable to misuse by money launderers and other criminals.
The U.S. Attorney's Office for the Southern District of Florida states that between January 2018 and April 2022, Todd ran an unlicensed futures platform and knowingly did not create, execute, or maintain a satisfactory Anti-Money Laundering system, which should have included a robust Know Your Customer program. It was also highlighted that Todd has previously publicly rejected the implementation of KYC policies for Digitex Futures. Upon his initial court appearance, Todd could be sentenced to up to five years in prison if found guilty.
This marks the second significant legal issue for Todd in less than a year, following a $16 million fine by a U.S. federal court seven months ago for not registering the futures exchange with the U.S. Commodity Futures Trading Commission (CFTC). In addition, the futures exchange was accused of price manipulation with DGTX token by the CFTC. Under the ruling, Todd and four of his businesses were forbidden from participating in any CFTC-regulated markets and ordered to pay just under $4 million in disgorgement, alongside a civil monetary penalty of over $11 million.
Digitex has been contacted for a response to these latest developments. It is yet to send a rebuttal.
Published At
2/14/2024 2:10:01 PM
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