Whistleblower Receives Over $1 Million from CFTC for Crucial Information in Cryptocurrency Trading Investigation

A crypto whistleblower has been granted a reward exceeding $1 million by the Commodity Futures Trading Commission (CFTC).

A press release dated August 8 indicates that thanks to the crucial intel provided by the whistleblower, the CFTC could initiate a legal enforcement pertaining to illicit activities in the cryptocurrency trading arena.

Whistleblower’s Alert Reveals Undetected Deceptive Practices

“Ensuring that illegal activities within the digital asset markets are exposed is a top concern for the CFTC, as increasing numbers of Americans fall prey to cryptocurrency fraud,” stated Ian McGinley, who leads the CFTC’s Enforcement Division.

McGinley also emphasized the importance the agency places on this sector, noting that almost 50% of the enforcement actions by the CFTC during the previous fiscal year targeted digital asset misconduct. Additionally, most of the whistleblower reports they received concerned similar issues with digital currencies.

The identity of the whistleblower is kept secret as mandated by the Commodity Exchange Act (CEA). This individual equipped the CFTC with “specific and reliable information” that brought previously unknown deceptive trading to light.

Brian Young, who helms the CFTC’s Whistleblower Office, confirmed that this critical information was instrumental for the agency’s swift action in a digital asset market-related case.

“Whistleblowers are increasingly becoming a vital element in our enforcement proceedings, particularly in the realm of digital assets,” Young pointed out.

Details on the CFTC’s Whistleblower Initiative

The Whistleblower Program at the CFTC, instituted under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, plays a crucial role in incentivizing people in the know to report wrongdoings.

Since awarding its initial bounty in 2014, the program has distributed close to $380 million in whistleblower awards, all related to legal actions which have culminated in roughly $3.2 billion in financial penalties. Noteworthy, these whistleblower awards may be connected to cases led by the CFTC or by other domestic or global regulatory bodies, provided certain conditions are met.

Whistleblowers, under the Commodity Exchange Act (CEA), may be entitled to a share ranging from 10% to 30% of the monetary penalties collected thanks to their provided evidence. Importantly, the CFTC’s Customer Protection Fund, which is completely financed by the financial sanctions of CEA violators, is the source of funds for these awards. No money from victims is used to support this initiative.

Moreover, the CEA ensures anonymity for whistleblowers and safeguards their identities, barring the release of any details that could potentially disclose their identity unless absolutely necessary under specific conditions.