The Commodity Futures Trading Commission (CFTC) paid a whistleblower more than $1 million for informing the regulator about “improper trading” related to the crypto market.
The CFTC notes the whistleblower’s information led to an enforcement action.
[adinserter block="1"]Ian McGinley, the regulator’s director of enforcement, says the majority of the CFTC’s whistleblower tips in the past fiscal year were related to digital assets.
“Identifying unlawful conduct in the digital asset marketplace is a major priority for the CFTC, especially as everyday Americans are increasingly victimized by digital asset scams. During the last fiscal year, digital asset cases accounted for almost 50% of the CFTC’s docket.”
The Whistleblower Program awards cash to those who voluntarily provide the CFTC with information about violations of the Commodity Exchange Act (CEA) that lead to successful enforcement actions with monetary sanctions exceeding $1 million.
Whistleblowers receive between 10%-30% of the sanctions collected. The program has yielded nearly $3.2 billion worth of sanctions and paid out around $380 million to whistleblowers since issuing its first award in 2014.
The CFTC has greenlit numerous enforcement actions against crypto firms this year. In January, the regulator filed a civil enforcement action against the exchange Debiex, claiming that the platform misappropriated funds that the victims intended for digital asset commodity trading.
In March, the CFTC and the Department of Justice (DOJ) unsealed an indictment against the crypto exchange KuCoin and two of its founders, alleging the firm created an “unlicensed money transmitting business” and failed to maintain an adequate anti-money laundering (“AML”) program, failed to properly verify the identity of their customers and failed to file suspicious activity reports.
And in May, the CFTC ordered the Seychelles-registered cryptocurrency brokerage firm Falcon Labs to pay nearly $2 million for allegedly failing to register with the regulator.
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