The US Commodity Futures Trading Commission (CTFC) has loaded crypto futures exchange Digitex and its founder and CEO Adam Todd for multiple violations associated with the Commodity Exchange Act (CEA).

According to the regulator’s filing, as seen Friday in the Southern District of Florida, the CTFC complaint accused Todd of using multiple corporate entities, including Digitex LLC, Digitex Ltd., Digitex Software Ltd. and Blockster Holdings Ltd. Corp. , – to run an illegal crypto derivatives trading platform.

According to the watchdog, Digitex Futures Exchange met the definition of a designated contract market or foreign board of trade, but was never registered with the CTFC as a futures commission merchant and thus violated the CEA.

The CTFC accused Todd and the entities of failing to implement adequate know-your-customer controls and a customer information program as required by the Bank Secrecy Act, a violation that can land violators in jail for up to five years.

The CTFC further alleges that Todd attempted to manipulate the price of the exchange’s native token, DGTX, by using non-economic transactions to “pump” its price higher. The regulator stated that Todd allegedly manipulated the price of DGTX by buying tokens, not with the intention of making money from individual transactions, but rather by artificially inflating the exchange’s holdings by increasing the price of the token.

“Unless restrained and ordered by this Court, Defendants are likely to continue to engage in the acts and practices alleged in this lawsuit and similar acts and practices,” the regulator stated in its filing.

The CFTC is seeking full restitution on behalf of the defrauded participants, as well as restitution, civil money penalties, trade, and registration bans against Todd and Digitex-related entities.

The agency’s enforcement action is the latest in a recent series of crypto-related lawsuits filed by the watchdog, which appears to be an ongoing crackdown on rule-breakers on crypto and other trading platforms. of digital assets.

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