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 that the whistleblower’s information led to enforcement actions.
Ian McGinley, the regulator’s director of enforcement, says the majority of the CFTC’s whistleblower tips in the last fiscal year were related to digital assets.
“Identifying unlawful behavior in the digital asset market is a key priority for the CFTC, especially as everyday Americans increasingly fall victim to digital asset scams. Last fiscal year, digital asset cases accounted for nearly 50% of the CFTC’s portfolio.”
The Whistleblower Program awards cash to those who voluntarily provide the CFTC with information about violations of the Commodity Exchange Act (CEA) that result in successful enforcement actions involving monetary penalties in excess of $1 million.
Whistleblowers receive between 10% and 30% of the sanctions collected. The program has generated nearly $3.2 billion in sanctions and paid out approximately $380 million to whistleblowers since its first award in 2014.
The CFTC has greenlighted numerous enforcement actions against crypto companies this year. In January, the regulator filed a civil enforcement action against the exchange Debiex, alleging that the platform had misappropriated funds intended by victims for digital asset trading.
In March, the CFTC and the Department of Justice (DOJ) unsealed charges against the crypto exchange KuCoin and two of its founders, alleging that the company established an “unlicensed money transmission business” and failed to provide adequate antitrust anti-money laundering (“AML”), failed to properly verify the identity of their customers and failed to file suspicious activity reports.
And in May, the CFTC ordered Seychelles-registered cryptocurrency brokerage Falcon Labs to pay nearly $2 million for allegedly failing to register with the regulator.
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