Adam Todd, the founder and former CEO of the Digitex Futures Exchange, has entered a guilty plea in federal court for the failure to establish an Anti-Money Laundering (AML) program at the company.
On May 7, the U.S. Attorney’s Office for the Southern District of Florida announced that Todd pleaded guilty to “willfully causing” Digitex to violate the Bank Secrecy Act. Todd was indicted by authorities in February. The indictment stated that Todd ran an unregistered futures platform for U.S. customers from 2018 to 2022, without implementing and maintaining AML and Know Your Customer (KYC) programs.
According to the U.S. Attorney’s Office, Todd could face a maximum sentence of five years in prison and a fine of $250,000. It is worth noting that former Binance CEO Changpeng Zhao, who faced similar charges, pleaded guilty in a different federal district in November 2023. Zhao was subsequently sentenced to four months in prison, although his reporting date has yet to be scheduled.
The U.S. Attorney’s Office has not announced a date for Todd’s sentencing hearing. According to his LinkedIn profile, Todd stepped down as the CEO of the exchange in October 2022 and has been working as the lead developer at Digitex Games since February 2023.
In 2020, Todd announced that there would be no KYC identity verification requirements following a data breach at Digitex. It was reported that a former employee of the exchange stole information from many users’ passports and driver’s licenses. At the time, Digitex claimed to be blocking U.S. IPs and requesting users to confirm that they were not based in the United States. The U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Todd and Digitex in 2022, and the following year, they won the case, resulting in an order for $16 million in disgorgement and penalties.
The increased focus on cryptocurrency-related crime by U.S. enforcement agencies is evident in these recent developments.