Blockchain / Crypto News / Cryptocurrency / Regulation · October 2, 2022

Digitex Futures Exchange And Its CEO To Face Scrutiny By CFTC

In recent months, the regulatory authorities in the United States have grown very aggressive against crypto-blockchain projects. The aggression from the regulators’ end has grown so much that the entire crypto community in the United States is very concerned.

There is a great fear that the cryptocurrency and blockchain sector may not survive or at least thrive in the United States. For the most part, it is the US Securities and Exchange Commission that is found in action against the crypto projects.

This time, it is the Commodity Futures Trading Commission (CFTC) in the United States that has gone after one of the major crypto firms in the country.

Complaint against Digitex LLC

The latest reports suggest that the US CFTC has filed a complaint against one of the major cryptocurrency futures exchanges in the country.

It has been confirmed through sources that Digitex LLC is the exchange that is currently facing a complaint filed by the US CFTC.

The regulatory authority has also filed a complaint against Adam Todd, the CEO and founder of Digitex, the cryptocurrency futures exchange.

The complaint has been filed about the registration failure of the exchange as well as the market manipulation for the DGTX token.

For the DGTX token’s price manipulation and the operations of the exchange without the registry with the CFTC, the regulator has filed a complaint against Adam Todd.

Allegations by the CFTC

The first hearing was carried out in Florida’s South District on September 30. At the court, the regulator claimed that Adam Todd adopted multiple tactics to pump up the price of the DGTX tokens

The allegations went on to claim that Todd carried out such activities in order to inflate the holdings for the Digitex exchange.

In order to achieve the goal of exchange holdings inflation, Todd used multiple corporate entities to his benefit. They were all involved in the particular scheme to make the exchange look big and too attractive to miss for the investors.

Using the same tactic, Todd launched the digital asset in the market that was developed by their company. As the token was developed and launched through illegal means, its existence is also considered illegal.

Now, the CFTC is taking legal action against the derivatives trading platform under the Commodity Exchange Act.

An Alarming Situation for Digitex

In the lawsuit, the CFTC has demanded that Digitex and Todd should be ordered to stop engaging in any kind of services related to cryptocurrencies.

It has clarified that any digital assets and cryptocurrencies falling under the category of a commodity must be blocked on the website.

The impact is already in place as Digitex reportedly put its futures and exchange websites offline.