Digitex CEO Indicted for Bank Secrecy Act Violation

Digitex CEO faces charges for breaching the Bank Secrecy Act by not implementing an anti-money laundering program.

Adam Todd, the founder and CEO of Digitex Futures Exchange, has been charged with breaching the Bank Secrecy Act by failing to design and implement an anti-money laundering (AML) program.

A federal court in the Republic of the United States brought the charges against him. Many consider the Bank Secrecy Act (BSA) an essential tool in combating criminal activity in the financial sector.

Because the BSA requires financial institutions to retain records and alert the Financial Crimes Enforcement Network (FinCEN) of certain transactions establishing an anti-money laundering program is an essential process for ensuring compliance with the BSA. 

The United States Attorney’s Office for the Southern District of Florida made the allegations against the CEO of the exchange public on February 12. The investigation was conducted by the Miami branch of the Federal Bureau of Investigation (FBI), and Assistant United States Attorney Trevor Jones is currently handling the prosecution of the case. 

According to the allegations made by the prosecution, Todd failed to establish an anti-money laundering program, which left the platform vulnerable to misuse by individuals who were involved in money laundering and other illicit activities.

The United States Attorney for the District of Columbia asserts that Todd “willfully failed to establish, implement and maintain an adequate anti-money laundering program including an adequate Know Your Customer program,” while operating an unregistered futures platform between the months of January 2018 and April 2022. 

Additionally, the indictment asserts that Todd has openly refused to establish Know Your Customer procedures for Digitex Futures. If found guilty, Todd could face a maximum prison sentence of five years. He made his initial appearance in court. 

The most recent charge against Todd comes nearly seven months after a federal judge in the United States ordered him to pay a sum of sixteen million dollars for failing to register the futures exchange with the Commodity Futures Trading Commission (CFTC) of the United States.

The Commodity Futures Trading Commission (CFTC) has also charged Digitex with manipulating the price of its native DGTX coin. The judgment prohibited the chief executive officer and four firms under his control from trading in any CFTC-regulated markets. Additionally, they were compelled to pay a civil monetary penalty to the tune of almost $12 million and disgorgement of almost $4 million.