On August 8, the Commodity Futures Trading Commission (CFTC) announced a $1 million whistleblower award issued to an individual who voluntarily provided original information which led to a successful enforcement action connected to digital asset markets.
According to the CFTC, the whistleblower provided information “about improper trading that was unknown to the CFTC” and their disclosure was “sufficiently specific, credible, and timely” to cause the agency to open an investigation.
“Whistleblowers have increasingly played a significant role in the CFTC’s enforcement actions in the digital assets space,” said Whistleblower Office Director Brian Young. “Here, the whistleblower provided sufficiently specific and credible information that assisted the CFTC in bringing a successful action.”
Through the CFTC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide original information that leads to a successful enforcement action, are eligible to receive monetary awards of 10-30% of the funds collected in the enforcement action.
In recent years, the CFTC has emerged as a major player in the regulation of cryptocurrency. The agency played a key role in the historic $4.3 billion settlement against Binance and nearly half of the agency’s enforcement actions in 2023 were related to crypto and digital assets.
Furthermore, for the past two years, a majority of whistleblower tips received by the program have related to crypto fraud.
“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,” said Director of Enforcement Ian McGinley. “During the last fiscal year, digital asset cases accounted for almost 50% of the CFTC’s docket, and the majority of whistleblower tips that year were related to digital assets.”
Overall, the CFTC Whistleblower Program has awarded approximately $380 million to whistleblowers and whistleblower-assisted cases have allowed the CFTC to recover nearly $3.2 billion.
Further Reading:
CFTC Awards Over $1 Million to Whistleblower Who Aided a Digital Assets-Related Investigation