The United States Commodity Futures Trading Commission (CFTC) has filed a complaint against against Digitex LLC and its founder and CEO Adam Todd on account of failing to register the cryptocurrency futures exchange and for manipulation of its DGTX token price, as reported by Cointelegraph.
According to Cointelegraph, through a recent court filing at the Southern District of Florida, it was found that Todd allegedly increased the price of of DGTX tokens for the purpose of inflating Digitex’s holdings. The US regulator made the claims that Todd used separate corporate platforms as part of his plan to start and operate an illegal digital asset dertivatives trading platform, with regard to violation of the Commodity Exchange Act.
On the basis of information by Cointelegraph, CFTC rules demand the performing of Know-Your-Customer (KYC) protocol and implementation of a customer information system. In 2020, Todd stated his plan to remove all KYC procedures from KYC with an aim to ensure better protection of user’s data. The complaint mentioned that CFTC asked for a court order to block Todd and Digitex from engaging is digital asset transactions considered commodities under the regulator’s purview. Additionally, the regulator expressed intentions for Digitex to pay civil monetary penalties, disgorgement, and restitution to affected parties. At the time of the publication’s writing, both Digitex’s and its futures website were offline.
Moreover, Cointelegraph noted that users in the cryptocurrency sector have heaped criticism towards regulators including the CFTC and Securities and Exchange Commission (SEC) for the purpose of taking a “regulation by enforcement” approach towards cryptocurrency in the United States. While SEC is currently involved in a legal batte against Ripple over whether the firm’s XRP sales violated securities laws, Caroline Pham, commissioner, CFTC, met with Brad Garlinghouse, CEO, Ripple, on account of a learning tour around cryptocurrency and blockchain in September.
(With insights from Cointelegraph)