Founder and former CEO of Digitex Futures Exchange, Adam Todd, has pleaded guilty to willingly leading the firm to fail to establish an Anti-Money Laundering (AML) program.
Notably, the former CEO’s plea was issued in a federal court in the Southern District of Florida on May 7.
The U.S. Attorney’s Office stated that Todd pleaded guilty to “willfully causing” Digitex to violate the Bank Secrecy Act. Indicted earlier this year, Todd was accused of overseeing an unregistered futures platform targeting U.S. customers from 2018 to 2022, allegedly neglecting vital Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols.
In 2020, Todd announced that there would be “no KYC identity verification requirements of any kind” following a data breach at Digitex. It was reported that a former exchange employee stole information from user’s passports and driver’s licenses.
At the time, Digitex claimed to be blocking U.S. IPs and requested users to confirm that they were not based in the United States. The U.S. Commodity Futures Trading Commission (CFTC) then filed a lawsuit against Todd and Digitex in 2022. The following year, they won their case, resulting in an order for $16 million in disgorgement and penalties.
According to Todd’s LinkedIn profile, he resigned as Digitex CEO in October 2022 and has been the lead developer at Digitex Games since February 2023.
Todd is facing up to five years in prison and a $250,000 fine for his actions. However, the U.S. Attorney’s Office has not yet announced Todd’s sentencing hearing date.
Digitex’s legal challenges add to the ongoing series of legal issues surrounding exchanges in the crypto industry, which also includes FTX and Binance.
In 2022, Sam Bankman-Fried, the former CEO of FTX, was arrested and extradited to the United States. Initially entering a plea of not guilty, he was placed under house arrest but subsequently remanded to jail due to allegations of witness intimidation. After a six-week trial, he was convicted and sentenced to 25 years in prison.
Conversely, Changpeng Zhao, the CEO of Binance, faced charges in 2023. He pleaded guilty and was granted bail, allowing him to remain free. Last month, he was sentenced to four months in prison.
Bankman-Fried faced seven felony charges related to defrauding investors and misusing customer funds. In contrast, Zhao faced one charge related to failing to maintain an effective Anti-Money Laundering program at Binance.
The post Former Digitex Futures Exchange CEO Pleads Guilty to Violating Bank Secrecy Act appeared first on CryptoPotato.
Notably, the former CEO’s plea was issued in a federal court in the Southern District of Florida on May 7.
Former Digitex CEO Pleads Guilty
The U.S. Attorney’s Office stated that Todd pleaded guilty to “willfully causing” Digitex to violate the Bank Secrecy Act. Indicted earlier this year, Todd was accused of overseeing an unregistered futures platform targeting U.S. customers from 2018 to 2022, allegedly neglecting vital Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols.
In 2020, Todd announced that there would be “no KYC identity verification requirements of any kind” following a data breach at Digitex. It was reported that a former exchange employee stole information from user’s passports and driver’s licenses.
At the time, Digitex claimed to be blocking U.S. IPs and requested users to confirm that they were not based in the United States. The U.S. Commodity Futures Trading Commission (CFTC) then filed a lawsuit against Todd and Digitex in 2022. The following year, they won their case, resulting in an order for $16 million in disgorgement and penalties.
According to Todd’s LinkedIn profile, he resigned as Digitex CEO in October 2022 and has been the lead developer at Digitex Games since February 2023.
Todd is facing up to five years in prison and a $250,000 fine for his actions. However, the U.S. Attorney’s Office has not yet announced Todd’s sentencing hearing date.
Crypto Exchange CEOs Face Legal Challenges
Digitex’s legal challenges add to the ongoing series of legal issues surrounding exchanges in the crypto industry, which also includes FTX and Binance.
In 2022, Sam Bankman-Fried, the former CEO of FTX, was arrested and extradited to the United States. Initially entering a plea of not guilty, he was placed under house arrest but subsequently remanded to jail due to allegations of witness intimidation. After a six-week trial, he was convicted and sentenced to 25 years in prison.
Conversely, Changpeng Zhao, the CEO of Binance, faced charges in 2023. He pleaded guilty and was granted bail, allowing him to remain free. Last month, he was sentenced to four months in prison.
Bankman-Fried faced seven felony charges related to defrauding investors and misusing customer funds. In contrast, Zhao faced one charge related to failing to maintain an effective Anti-Money Laundering program at Binance.
The post Former Digitex Futures Exchange CEO Pleads Guilty to Violating Bank Secrecy Act appeared first on CryptoPotato.
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