A federal court has decided Adam Todd, the Founder and CEO of the four companies Digitex LLC, Digitex Limited, Digitex Software Limited, and Blockster Holdings Limited Corporation will have to pay more than $15 million in fines.
The judgment occurred after the Commodity Futures Trading Commission’s (CFTC) accused them of violating laws regarding manipulation and registration for which the parties were fined $3,912,220 for disgorgement and $11,736,660 for civil monetary penalty.
CFTC enforcement director Ian McGinley suggested that Todd purportedly utilized a computerized bot to artificially inflate the price of DGTX. In 2020, Todd allegedly deployed this bot on third-party exchanges, which helped Digitex to purchase more DGTX tokens compared to its sold tokens. The commission took legal action against Todd and Digitex in September 2022.
As a result of this judgment, Adam Todd and the four companies are now banned from engaging in trading within any “CFTC-regulated markets” until the penalty is paid.
McGinley emphasized that the CFTC will aggressively exercise its established authority to ensure proper registration of entities and address the manipulation of commodities in interstate commerce, regardless of the technology employed.
Additionally, the CFTC included a warning to investors in its statement. The commission advised that orders mandating the payment of funds to victims might not necessarily lead to the recovery of lost money, as the wrongdoers might lack sufficient funds or assets. “The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.”
It is worth noting that the $15 million order and any potential financial penalties may not guarantee restitution for Digitex users.
Also read: Florida Men Ordered by CFTC to Pay $5.4M Bitcoin Fraud Case
