Why Digitex Failed — Spotware Reveals

We are Spotware Systems, a 10-year-old software development company with a huge amount of respect in the online trading industry. Our products have stood the test of time. We provide trading platforms to dozens of the largest brokers in the world who operate in some of the strictest regulatory environments. We have recently made a pivot into the crypto world to provide our established technologies to this emerging sector.

Coming from a world of contracts and commitments, a client base of established and regulated companies, we have been burnt by some of the bad actors from the wild-west of crypto. We just took on a new client called Digitex Ltd. Some bold allegations made by Adam Todd. He is the CEO and main figurehead of Digitex Futures. Digitex is funded by their token sale and the appreciation of the DGTX token. Digitex recently canceled their public launch. As well as breaking all kinds of business ethics and playing many dirty tricks, they pointed the finger at Spotware in this announcement. We are here to set the record straight with the truth.

How the Digitex Project Started

Adam Todd reached out to us on the 15th of January 2019. This was just after they failed to build and launch their platform, presumably with their Dev team in Ireland. He wanted to have an MVP beta in two months — an unheard of a timeframe for building a trading platform. Normally it takes that long to build the specs. He was desperate and we chose to consider this project to help the man to stay out of trouble.

He needed something to show DGTX holders that he could deliver on his promises. We could see that he was very keen to keep his community engaged. It was as if he only cared about his messages to the community and not the product.

The Agreed Terms, Requirements, Scope and Deadlines

In late January Mr. Todd and our team agreed on a bullet-pointed list of features and signed a Letter of Intent. Our mission here was to help a desperate man who by the looks of it didn’t know what he was doing, so we said OK to specs of such low detail — expecting more input from the customer later.

But Mr. Todd didn’t want to bother with the specs — as if the platform wasn’t meant to suit his needs. So we’ve built everything in the bullet-pointed list of requirements to the best of our knowledge, including an institutional grade matching engine, a limit order book, margin requirements for the limit orders, a futures expiration functionality, a ladder interface with single click DoM trading for placing limit orders, etc.

As for deadlines, we never agreed on anything. We delivered the Beta MVP to the client on the 2nd of April 2019 — this is when the UAT (User Acceptance Testing) stage was meant to start. We would never agree to a public launch on the 30th of April (long Easter weekend) which Mr. Todd announced publicly. In fact, the public launch was never agreed with us at all. It was absolutely wrong of Mr. Todd to announce a public release without actually testing the project.

Is it Possible to Build a Futures Exchange Platform in 2 Months?

It is not possible. Spotware offers two out-of-the-box products: cTrader (a CFD margin trading platform) and cXchange (a digital asset exchange product). Both are proven mature products with millions of traders and with an impeccable reputation. None of them are made for a crypto futures exchange, futures being an entirely different asset class.

But Mr. Todd didn’t care about that — he insisted that he needs a cTrader-based product with relatively minor changes. This essentially gave him a 10-year old product within a couple of months. We agreed to help the man as he was out of options. He said many times that trying to build the platform himself was a road to nowhere. He cleverly said that Digitex outsourced the final build of the platform to Spotware. In fact, we managed the entire build — don’t forget our first contact with Mr. Todd was on the 15th of January 2019. Digitex didn’t contribute any code. They didn’t even contribute any know-how.

Did Spotware Plan to Officially Announce its Participation in Digitex?

We did not. As a part of the agreement, we included confidentiality terms to make sure that Digitex can’t use Spotware’s name. We were afraid they would use it for token price speculation. We really did not want to be involved in their token business. It was agreed we were supposed to be a silent partner. We declined to do joint press releases and announcements. However, this condition was broken multiple times. We now realize it is possible that it could be done intentionally to pump the price of the token by leveraging the name of Spotware.

Who Set the 30th of April Launch Date?

We had nothing to do with this. As professional software developers, we would never agree on a launch date until everything has been thoroughly tested and is bug-free. Adam Todd decided to publish a launch date when we were just weeks into the project. The date is out there and it wouldn’t look good for Digitex to change it so we rolled with it but still never committed to that. If it was up to us, would never have signed off on launching the platform over a 4-day period of Bank Holidays here in Cyprus. The 26th, 29th, and 30th of April and the 1st of May are all Bank Holidays.

Don’t forget, Adam Todd first contacted Spotware on the 15th of January 2019. Just 7 days later he is telling his community in a video on YouTube that Digitex is ahead of schedule and that there is a chance that the platform will be released in Q1. Right after, he states that everyone misunderstood their previous Beta Launch date of the 15th of January (the same date he contacted Spotware). Clearly, Mr. Todd has no respect for deadlines.

Where the Digitex Project Went Wrong

After we’ve built and delivered everything in the initial scope which was signed-off on by Mr. Todd himself, very close to the MVP Beta release he came up with a number of new requirements. Again, oversimplistic, unprofessional, generic. It was impossible to build them in a few days as he wanted — we’ve made him aware of the time and cost required to build. Nonetheless, he released a video post where he praises the platform again, which got us thinking of whether he ever wanted the platform to be released and put to production.

Mr. Todd never logged into the Platform Manager application to set the environment up or at least to get familiar with the million settings available to him. This in itself is hard to explain as obviously there is no other way to manage a trading platform. We sent multiple reminders to attend a series of training sessions for his back office and admin team. But it seems there were no such teams at all. Again, this was a hint that his intentions were not to ever release and manage the platform, but rather gain profit elsewhere.

He took days, weeks or just didn’t bother at all to respond to very simple questions. Three weeks before the Beta MVP release he pushed us for new things and turned up the heat. As you would do with a child, we had to tell him no. We explained that it was for his own good. We were at the final stage, where we should only be fixing bugs and performance testing. We told him all new requests must go into the next iteration.

Our last contact with Adam Todd was on the 15th of April. They didn’t even follow up on our suggestions on how to resolve his issues. This looks like the point where he started planning his smear campaign. This was two weeks before the release date and we could tell he had no interest in meeting it.

Adam Todd was clearly more interested in promoting the Digitex platform that was he was never ready to launch.

Thoughts on Adam Todd’s Video and Post

The NDA between the parties clearly states that he cannot use our brand in his marketing activities. There have been a series of posts from Mr. Todd praising the platform we were delivering to him. Even though he was all positive about our product, we requested him not to mention our brand names.

He refused to take our logo down from his website, he refused to take down other posts with mention of our brand. This in itself is grossly unprofessional and is in breach of the agreement. Clearly, he illegally used the weight of our brand for manipulation purposes elsewhere. We are certain somebody is already checking his trading activity.

Mr. Todd has done a very good job of bending the truth to fit his agenda. Some parts are completely fabricated. He has clearly decided to use Spotware’s name as a scapegoat to minimize the blow on himself. Or for his manipulative objectives.

Which Parts of the Video Stand Out

First of all, a platform which has been around for so long, used by so many well-established global financial institutions and far more reputable companies than Digitex could be unfit for purpose is complete insanity.

Adam Todd is a very good manipulator, and this is a necessary trait of a successful con-man. He claims we couldn’t do things, then contradicts himself in the next sentence and says that we could. When he gets requoted, they only publish the part of his comment that would be click bait. The entire context of this video was set up to achieve this and get third parties to do his bidding. All those who oppose get banned.

Here are some highlights from a series of unsubstantiated claims made by Mr. Todd:

The platform didn’t have a 24h volume figure and we can’t get one.

This was not in the initial set of requirements signed off on the 1st of Feb 2019. It was later agreed to add this feature, along with last traded price and last traded volume figures, which also were not in the initial requirements. We agreed that we could only deliver 2 out of 3 of those features. Mr. Todd chose which two were most important for the first release.

It’s not possible to add Spot Price into the ladder.

Not in the initial scope. We estimated this and sent an offer with options on the 11th of April.

No price of the underlying trading instrument in the platform.

It was there all along. We integrated with Coinmarketcap and Bitcoinaverage to show this in the watchlist. We told Mr. Todd that it can be shown as a separate instrument to avoid extra development and time to market. Mr. Todd accepted this.

Can’t remove buttons on the chart of the disabled symbol (underlying asset). That’s impossible.

Not in the initial scope. We explained multiple times that it’s considered a new feature and it will need to be planned for the next release.

A trader can’t change his leverage. It’s stuck at 1:10.

These are business settings and not platform restrictions. The platform supports any leverage up to 1 to 2000. Mr. Todd did not accept training on the platform. He did not even bother logging in to the Manager application once to see the settings for this particular variable.

Cannot close positions on the ladder if you do not have enough margin.

The Ladder is used for inputting Limit Orders. It was agreed on the Letter of Intent that margin should be taken for Limit Orders. There are multiple ways to exit positions using Market Orders in the platform. Unfortunately, these are two conflicting requirements that occurred thanks to Adam’s oversight.

The market making bots are losing $20,000 USD or tokens per day.

We did not provide any market making bots, so we can’t comment on that.

We’ve built an edge into the exchange. It’s essentially a commission.

As per initial requirements, DGTX should have a precision of 2 decimals. This means that in cases of sweeping large orders across the book VWAP cannot be accurately calculated. We prepared multiple options for addressing this issue, however, Mr. Todd and his team were not available to discuss this.

It doesn’t work.

All requirements are met. It’s obviously working on the screen in the video. Product was delivered.

We could easily argue that we are in the right for every single point made in Adam Todd’s shameless video. Besides being a total scam, there is only one good alternate reason for not accepting the platform, the company did not have the funds to pay for it.

Spotware’s Take on the Commission-free Digitex Futures Exchange Project

The business model is questionable to say the least. Running an exchange is a costly operation, especially today with all the new regulation globally. But most importantly revenues need to scale together with expenses — not sure how it’d be possible to finance through issuing coins. But that is none of our business.

What’s more important — it recently became apparent to us that Mr. Todd did not have the infrastructure in place for the public release date which he one-sidedly decided on and announced publicly. This includes the absence of a KYC/AML team, making his amateur operation entirely illegal right from launch. Other pieces of the puzzle were not in place either.

What it was Like Working with Adam Todd

Challenging. He could never articulate requirements. His managerial skills are maxed out at pointing at stuff, threatening and swearing. Adam Todd is a salesman, that’s where his aptitude for business stops. He did not show any capacity for understanding financial markets, mathematics or software development processes.

Does Spotware Have Anything to Say to People Who Bought DGTX?

We feel bad for the investors who bought into Digitex. We feel we have been swindled too. Digitex hasn’t paid us for the work we completed. We understand that our pain is insignificant in comparison to some people who bet their life savings on the DGTX token.

He has abused our reputation to increase his own credibility. But, we have done nothing wrong and should not be blamed for Digitex’s business decision to discard the working product which we built according to a scope of work approved by Mr. Todd himself.

For anyone who doesn’t believe us, we will be releasing a demo of the platform we built for Digitex publicly once we remove their branding. The community of Digitex investors can decide for themselves if Adam was right to abandon the product we developed.

Was Spotware Suspicious that Adam Todd was Planning Something?

Yes. There was a distinct lack of engagement throughout April. All the while he was at the Paris Blockchain Summit between the 13th and 19th of April. Adam was confirming the 30th of April launch date. At the same time, Digitex is expressing their gratitude to Spotware on their website and social media (which is a breach of the confidentiality agreement) for a job well done and making pre-launch teaser videos.

In hindsight, it looks like Digitex tried to set this up so it would come tumbling down on Spotware. They published the video at 7 pm on a Friday night, knowing it would be difficult for us to respond. This attack needed to be planned. Those efforts should have been focused on meeting their own launch-date, not orchestrating a PR assault on Spotware.

Was Adam Todd Just Hijacking Spotware’s Reputation?

Who knows what his plans were. Who knows how much the token price appreciated by leveraging Spotware’s name, judging by the historical charts, it would seem to be about 4x. Who knows if he dumped his tokens once the price had peaked, at the point when he had already stopped communicating with Spotware. Who knows how many he bought back at the low. Who knows if this will all happen again in another three months. Who knows how much was made at the expense of tarnishing Spotware’s name.

Next Steps

Seek justice.