Bank Secrecy Act Ex-CEO Pleads Guilty: 3 Shocking Violations

Todd admits guilt in breaching Bank Secrecy Act, faces possible 5-year jail term and $250K fine.

Adam Todd, the founder and former CEO of Digitex Futures Exchange, entered a guilty plea for willfully causing the company to neglect implementing an anti-money laundering (AML) policy.

Notably, on May 7, the former CEO entered a plea in a federal court in the Southern District of Florida.

According to the U.S. Attorney’s Office, Todd entered a guilty plea to “willfully causing” Digitex to violate the Bank Secrecy Act. Todd was charged earlier this year with managing an unregistered futures platform that catered to American clients from 2018 to 2022 while allegedly disregarding crucial Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.

After a Digitex data breach in 2020, Todd declared there would be “no KYC identity verification requirements of any kind.” According to reports, a former exchange employee stole data from users’ driver’s licenses and passports.

At the time, Digitex asked users to verify that they were not headquartered in the U.S. and claimed to be banning U.S. IP addresses. Next, in 2022, the U.S. Commodity Futures Trading Commission (CFTC) brought legal action against Todd and Digitex. The following year, they prevailed in their action, and an order for $16 million in disgorgement and penalties was issued.

Todd has been the chief developer of Digitex Games since February 2023, and his LinkedIn page states that he left his position as CEO of Digitex in October 2022.

Todd’s acts might result in up to five years in prison and a $250,000 fine. The U.S. Attorney’s Office still needs to disclose the date of Todd’s sentencing hearing.

The legal troubles facing Digitex are an addition to the continuing string of problems involving cryptocurrency exchanges, which also involve FTX and Binance.

The former CEO of FTX, Sam Bankman-Fried, was detained and deported to the U.S. in 2022. After pleading not guilty at first, he was put under home arrest but was later sent back to prison because of accusations of coercion of witnesses. Following a trial that lasted six weeks, he was found guilty and given a 25-year prison term.

On the other hand, in 2023, Binance CEO Changpeng Zhao was charged. After entering a guilty plea, he was given bail and allowed to stay at liberty. He got a four-month prison sentence last month.

Bankman-Fried was charged with seven felonies concerning misappropriating client funds and misleading investors. On the other hand, Zhao was accused of neglecting to keep Binance’s anti-money laundering program up to date.