.Digitex_io founder Adam Todd has been charged by the CFTC for multiple violations of the Commodity Exchange Act. cheyenneligon reports
) platform for failing to register as an exchange, it’s not a surprise to anyone paying attention to what the regulator has been saying about DeFi platforms.
“Former CFTC Commissioner Dan Berkovitz foreshadowed this action in a June 2021 speech where he stated that ‘not only do I think that unlicensed DeFi markets for derivative instruments are a bad idea, I also do not see how they are legal under the CEA,;'” Selig said. “The Digitex action demonstrates that the CFTC is focused on both intermediaries that offer margin and financing to retail crypto-asset traders as well as the platforms.
Because Todd and the Digitex platforms were never registered with the CFTC as futures commission merchants, the operation was a violation of the CEA, according to the complaint. Todd and the entities are further accused of failing to implement proper know-your-customer practices as required by the Bank Secrecy Act – a violation thatTodd is also accused by the CFTC of attempting to manipulate Digitex’s native token, DGTX, using noneconomic trading to “pump” its price higher.
The CFTC is seeking civil monetary penalties, disgorgement, restitution, and trading and registration bans against Todd and the Digitex-related entities.