Adam Todd, the founder of Digitex crypto exchange, has been ordered by a federal court to pay around $16 million to resolve allegations of running an illegal platform and manipulating the native token, DGTX.
The U.S. Commodity Futures Trading Commission (CFTC) announced this development, marking their first case against a decentralized finance (DeFi) platform for failure to register as an exchange.
The court found Todd in violation of commodities laws and imposed a trading ban. However, it remains uncertain if Todd or the company has the resources to reimburse affected customers.
The U.S. District Court for the Southern District of Florida concluded the CFTC’s case against Todd, ruling that he had violated several commodities laws while operating Digitex Futures, a Florida-based exchange.
The court ordered Todd to pay a $12 million fine and approximately $4 million in disgorgement. The ban from trading was also imposed. It remains unclear whether Todd or the company will be able to fulfill their financial obligations to compensate customers.
The court also found evidence that Todd had attempted to manipulate the price of Digitex’s native utility token, DGTX, through the use of a computerized bot.
This manipulation involved artificially inflating the token’s price, a practice commonly known as “pumping.” The CFTC highlighted that this case represents another action against an individual and digital asset exchange illegally offering futures contracts to U.S. customers.