A US federal court has ordered Adam Todd, CEO of digital assets exchange Digitex, to pay nearly $16 million in rebates and penalties. The Commodity Futures Trading Commission (CFTC) filed a complaint against Digitex and Todd on suspicion of price gouging and non-registration, which led to this decision.

The CFTC initially filed charges against Digitex and Todd in September 2022. The charges related to the alleged price manipulation of Digitex Futures’ native token DGTX and the company’s failure to register with the CFTC. Todd allegedly used a computerized bot to artificially inflate the price of DGTX. The bot was reportedly deployed to third-party exchanges in 2020 to buy more tokens than it sold.

The court ruling prohibits Todd and the four companies it controls from operating in any CFTC-regulated market: Digitex LLC, Digitex Limited, Digitex Software Limited and Blockster Holdings Limited Corporation. In addition to the ban, the ruling orders Todd and his business to pay a civil money penalty of $11,736,660 as well as $3,912,220 in repayment.

The CFTC’s enforcement action against Todd and Digitex Futures has now been resolved with this order. However, it is important to note that the $16 million request or additional financial penalties may not necessarily result in a refund to Digitex users.

The regulatory scrutiny that cryptocurrency companies must endure is clearly shown in this example. It emphasizes the need to comply with legal requirements, such as those related to registration and the prohibition of manipulative business practices.

In line with SECONDthe CFTC is taking steps to ensure entities are legally registered and address commodity tampering.

On March 27, 2023, the CFTC filed a civil enforcement action against chang peng zhao, CEO of Binance, and three entities operating the Binance platform for numerous violations of Commodity Exchange Act (CEA) and CFTC regulations. The complaint also implicates Samuel Lim, former Binance Chief Compliance Officer, for aiding and abetting Binance breaches. The CFTC seeks remand, civil money penalties, permanent trading and registration bans, and a permanent injunction against further violations of CEA and CFTC regulations.