Ex-CEO of Digitex Futures Exchange Pleads Guilty to Violating Bank Secrecy Act

The founder and former CEO of Digitex Futures Exchange, Adam Todd, has pleaded guilty to willfully leading the company to fail to establish an anti-money laundering (AML) program.

In particular, the former CEO’s petition was issued in a federal court in the Southern District of Florida on May 7.

Digitex’s former CEO pleads guilty

The U.S. Attorney’s office said 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 US clients 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. A former exchange employee was reported to have stolen information from users’ passports and driver’s licenses.

At the time, Digitex claimed it was blocking US IPs and asked users to confirm they were not based in the US. The US Commodity Futures Trading Commission (CFTC) filed suit against Todd and Digitex in 2022. The following year, they won their case, resulting in an order of $16 million in disgorgement and penalties.

According to Todd’s LinkedIn profile, he stepped down as CEO of Digitex in October 2022 and has been the lead developer of Digitex Games since February 2023.

Todd faces up to five years in prison and a $250,000 fine for his actions. However, the US Attorney’s office has not yet announced a date for Todd’s sentencing hearing.

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. He initially pleaded not guilty, was placed under house arrest, but was later jailed on allegations of witness intimidation. After a six-week trial, he was convicted and sentenced to 25 years in prison.

By contrast, 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 client funds. Instead, Zhao faced a charge related to failing to maintain an effective anti-money laundering program at Binance.

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