CFTC fines Bitcoin exchange Digitex $15 million

The U.S. federal court ordered the cryptocurrency exchange Digitex Futures and its CEO Adam Todd to pay $15 million as a penalty under a suit by the CFTC alleging fraud and unlicensed activity.

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According to the regulator’s statement, the company sought to manipulate the price of its native token DGTX, illegally offering futures contracts, failed to register with the agency, and did not implement KYC/AML procedures.

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According to Ian McGinley, the head of enforcement, Todd allegedly “pumped” the token with a computerised bot.

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“From May through August 2020, Digitex Futures required users to deposit DGTX into their accounts for margin trading on the futures exchange. Throughout the summer, as the exchange prepared to launch, Todd repeatedly attempted, in his own words, to push up the token’s price, as reported by external exchanges,” the official explained.

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The court also ordered a ban on Digitex and related entities.

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The CFTC warned that the payments to victims are unlikely to be fully collected given the violators’ potential lack of funds or assets to satisfy the judgment.

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In April 2023, a court ordered Hydrogen Technology Corp. a fine of $2.8 million under an SEC lawsuit alleging token price manipulation.

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In March, the regulator secured a verdict in favor of charges against John and Jonatina Barksdays over their creation of the fraudulent scheme Ormenus Coin. They will pay $102 million.