Regulation
Former Digitex Futures Exchange CEO Pleads Guilty of Bypassing US Banking Law
Adam Todd, the founder and ex-CEO of Digitex Futures Exchange, has pleaded guilty to not implementing mandatory Anti-Money Laundering (AML) measures as required under the Bank Secrecy Act. The plea was accepted in a federal court of the Southern District of Florida, and on May 7, the U.S. Attorney’s Office announced the occurrence. Todd’s admission of his position mistake becomes a major compliance failure point in the cryptocurrency exchange sector.
These allegations show Todd’s active role in the operation of an unregulated futures trading platform servicing U.S. customers from 2018 to 2022 without the required AML and Know Your Customer (KYC) schemes. This is essential for halting illicit financial activities. The plea of guilty by Todd could result in a five-year jail term and a fine of $250,000, thus demonstrating the harsh penalties for such violations.
Ex-Digitex Futures Exchange CEO Pleads Guilty to AML Failures
Todd’s case is an industry-wide problem, just like the previous legal issues of former Binance CEO Changpeng Zhao (CZ). Zhao pleaded guilty in November 2023 and, in April, received a four-month prison sentence. Cases such as these illustrate a heightened inspection in the crypto industry, with U.S. regulators toughen the enforcement to prevent illegal activities. Todd has not as yet been sentenced, further perpetuating the story of regulatory oversight in the fintech space.
Although Todd resigned as CEO in October 2022, he has been actively involved in the industry since February 2023 as lead developer for Digitex Games. His continued involvement in the tech world in spite of legal battles is a classic example of resilience common among tech entrepreneurs struggling with regulatory barriers. The industry’s legal responses to these legal challenges could set future compliance standards for such platforms.
KYC Removal Intensifies Digitex CEO’s Legal Issues
The plea is the latest in a sequence of regulatory measures against Todd and Digitex. These include the 2022 lawsuit filed by the U.S. Commodity Futures Trading Commission (CFTC) that ended in a 2023 judgment requiring Todd and his company to pay $16 million in penalties and disgorgement. This result is not only a financial lesson of regulatory non-compliance but also an indication to other companies about the need to follow U.S. laws.
In 2020, the controversy became more intense when Todd declared that all KYC checks should be wiped out after a big data breach that exposed user information. The act, though aimed at preserving user privacy, flouted regulatory requirements and hence added to his legal problems.
Read Also: Robinhood to Report Big Quarterly Earnings Report, Joins Crypto Fight Against SEC
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Hawk Tuah girl Hailey Welch, known for her association with the controversial $HAWK token, has been cleared of any wrongdoing after a lengthy investigation by the U.S. Securities and Exchange Commission (SEC). The SEC has decided not to press charges against Welch in connection with the rapid rise and subsequent collapse of the meme-based cryptocurrency.
US SEC Investigation Into Hawk Tuah Girl Concludes Without Charges
The SEC had launched an investigation into the $HAWK token after its dramatic price drop. The token, which was linked to Welch’s viral persona, initially saw a market cap surge to $490 million before crashing by over 90%. Investors who were impacted by the crash filed a lawsuit against those behind the project, alleging that the coin had been promoted and sold without proper registration.
Hawk Tuah girl Hailey Welch, who cooperated fully with the investigation, expressed relief after the SEC’s decision. “For the past few months, I’ve been cooperating with all the authorities and attorneys, and finally, that work is complete,” Welch told TMZ.
Her attorney, James Sallah, confirmed that the SEC had closed the case without any findings against her, adding that there would be no monetary sanctions or restrictions on Welch’s future involvement in cryptocurrency or securities.
This Is A Developing News, Please Check Back For More
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Barely a week after hinting at launching an algorithmic USD stablecoin, Sonic Labs is shuttering its plans. Sonic Labs co-founder Andre Cronje revealed that incoming stablecoin regulation in the US contributes to the change of stance.
Sonic Labs Makes U-Turn Over Algorithmic USD Stablecoin
In mid-March, Sonic Labs disclosed plans for a yield-generating algorithmic stablecoin for its blockchain. However, new developments in the US regulatory landscape are forcing the company to ditch its algorithmic stablecoin ambitions.
Sonic Labs co-founder Andre Cronje confirmed the change in direction via an X post following the release of the full draft of the STABLE Act by Congress for clearer oversight. According to the text, lawmakers are pushing for a two-year moratorium on algorithmic stablecoin, souring Sonic Labs plans.
Unlike mainstream stablecoins backed by fiat or other commodities, algorithmic stablecoins rely on smart contracts to maintain their peg. The 2022 implosion of Terra’s ecosystem following the de-pegging of its TerraUSD (UST) algorithmic stablecoin stunned regulators.
“We will no longer be releasing a USD-based algorithmic stablecoin,” said Cronje.
In a light-hearted note, community members teased potential strategies for Sonic Labs to sidestep incoming stablecoin regulation. Apart from the loophole of launching the algorithmic stablecoin before the regulation goes live, Cronje teased an algorithmic dirham that will be denominated in USD.
Industry Players Are Bracing For New Stablecoin Regulations
Stablecoin issuers are steeling themselves for incoming stablecoin regulations in the US. While the GENIUS Act and STABLE Act continue to inch forward, there are common denominators in both bills.
For starters, there is the requirement for equivalent reserves at a 1:1 ratio with both bills steering clear of algorithmic stablecoins. The White House is favoring the GENIUS Act over the STABLE Act as lobbyists rally to stifle the possibility of a Conference Committee.
Authorities are targeting stablecoin regulation to reach Trump in two months as issuers jostle for position. Tether, Circle, and Ripple are staking their claims to lead the US government’s ambitions to rely on stablecoins to maintain the dollar’s dominance.
Aliyu Pokima
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
The Federal Deposit Insurance Corporation (FDIC) has updated its guidelines, enabling banks to engage in cryptocurrency-related activities without seeking prior approval. This new policy shift signals a change in the FDIC’s approach to the growing role of digital assets in the banking sector.
New FDIC Guidelines on Crypto-Related Activities
The FDIC has issued a new Financial Institution Letter (FIL-7-2025), which provides updated guidance for banks looking to engage in cryptocurrency activities. The new guidance rescinds the previous policy set out in FIL-16-2022, which required banks to notify the FDIC before engaging in such activities.
Under the new rules, banks can now participate in permissible crypto-related activities without waiting for FDIC approval, as long as they manage the risks appropriately.
This change is seen as a shift in the FDIC’s stance, following the agency’s earlier stance that required prior approval for crypto engagements. FDIC Acting Chairman Travis Hill expressed that this new approach aims to establish a more consistent framework for banks to explore and adopt emerging technologies like crypto-assets and blockchain.
“With today’s action, the FDIC is turning the page on the flawed approach of the past three years,” said Hill in a statement.
This Is A Developing News, Please Check Back For More
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Trump Pardons BitMEX Founders, Sparking Community Unease
Ethereum Price Hits 300-Week MA For The Second Time Ever, Here’s What Happened In 2022
US SEC Drops Charges Against Hawk Tuah Girl Hailey Welch
PiDaoSwap, Trump Media, & Grayscale
Coinbase Users Lost $46 Million to Crypto Scams in March
Sonic Labs To Abandon Plans For Algorithmic USD Stablecoin, Here’s Why
2.52 Million Altcoins Are Ruining Crypto’s Future
Animoca Brands Valuation Tanks 75% In Two Years, Here’s Why
Crypto exchange BingX hacked for $43 million
Are The Big Players Losing Interest?
Hong Kong’s Securities Association Tips Authorities On Crypto Self-Regulation
Coinbase cbBTC Set to go Live on Solana
2.52 Million Altcoins Are Ruining Crypto’s Future
Animoca Brands Valuation Tanks 75% In Two Years, Here’s Why
Crypto exchange BingX hacked for $43 million
Are The Big Players Losing Interest?
Hong Kong’s Securities Association Tips Authorities On Crypto Self-Regulation
Coinbase cbBTC Set to go Live on Solana
-
Market23 hours agoBinance To List MUBARAK, BROCCOLI, BANANAS31, and Tutorial
-
Altcoin22 hours agoAnalyst Reveals Why The XRP Price Will Dominate Bitcoin & Ethereum
-
Bitcoin22 hours agoBitcoin Bet Grows Bigger: The Blockchain Group Snaps Up 580 BTC
-
Market21 hours agoHyperLiquid Responds to JELLY Crisis Amid Community Backlash
-
Market20 hours agoBinance Alpha Lists Ghibli Meme Coins Amid ChatGPT Hype
-
Altcoin20 hours agoDogecoin Cup And Handle Pattern Signals Recovery To $0.4, Here’s How
-
Market19 hours agoWhy BTC Price Stayed Unchanged
-
Market18 hours agoBitcoin Price Stalls at $88K—Can Bulls Overcome Key Resistance?
✓ Share: