CFTC awards more than $1 million to whistleblower for major tip in crypto trading case

The Commodity Futures Trading Commission (CFTC) has awarded over $1 million to a crypto whistleblower.

According to an August 8 press release, the whistleblower’s information allowed the CFTC to take an enforcement action related to improper trading in digital asset markets.

Whistleblower’s advice uncovers hidden improper trading

“Identifying illegal conduct in the digital asset market is an important priority for the CFTC, especially as ordinary Americans are increasingly victims of digital asset scams,” said Ian McGinley, director of CFTC enforcement.

He also highlighted the agency’s focus in this area, noting that in the last fiscal year, nearly half of the CFTC’s enforcement actions were related to digital asset cases. He added that the majority of whistleblower tips received by the agency during that time were also related to digital assets.

The whistleblower, whose identity is protected under the Commodity Exchange Act (CEA), provided the CFTC with “sufficiently specific and credible information” that uncovered previously unknown improper trading activities.

According to Brian Young, director of the CFTC’s Office of Whistleblowers, this information allowed the regulator to take decisive action in a case related to digital asset markets.

“Whistleblowers have increasingly played an important role in the CFTC’s enforcement actions in the digital asset space,” Young noted.

CFTC Whistleblower Program

The CFTC’s Whistleblower Program, established under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, has been instrumental in encouraging insiders to come forward with information about misconduct.

Since its first award in 2014, the program has issued awards totaling approximately $380 million, tied to enforcement actions that have resulted in nearly $3.2 billion in monetary penalties. In particular, whistleblower awards may be tied to actions directed by the CFTC as well as those initiated by other domestic or foreign regulators, provided that specific criteria are met.

Under the Commodity Exchange Act (CEA), whistleblowers can receive between 10 and 30% of monetary penalties collected as a result of their information. Notably, all whistleblower awards are paid out of the CFTC’s Consumer Protection Fund, which is funded entirely through monetary penalties paid by CEA violators. No funds are taken from injured customers to support the program.

The CEA also provides confidentiality protections for whistleblowers and does not disclose their identity or any information that could reasonably be expected to reveal their identity, except in limited circumstances.

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