- The CFTC has rewarded crypto whistleblowers with $16 million so far in 2023, a record year for the program.
- Most of the tips received by the CFTC this year involved crypto.
- Two whistleblowers received $15 million each for information that led the CFTC to successful enforcement cases in September.
- The CFTC has brought several successful crypto cases in 2023, including a $300 million case against My Forex Funds and $3.4 billion against Benjamin Reynolds.
- Romero applauded the importance that whistleblowers play in assisting the CFTC.
The Commodity Futures Trading Commission, or CFTC for short is the US federal agency that regulates the trading of commodities, futures and options within the country.
So far, the Commodity Futures Trading Commission has been in the news a lot lately, especially after suing Binance and its CEO, Changpeng Zhao, for a number of offences.
However, this agency doesn’t always enforce its rules and protects customers by going after individuals and companies all by itself.
The agency reportedly has a whistleblower program, which rewards individuals who provide information that leads to successful arrests, lawsuits and other enforcement.
The CFTC’s whistleblower program was established in 2014. And according to recent reports, and has paid out almost $350 million to whistleblowers since then.
A Record Year for Crypto Tips
According to a recent statement by CFTC Commissioner Christy Goldsmith Romero, the whistleblower program has had a record year in 2023, paying out an amazing $16 million to whistleblowers who helped the Commodity Futures Trading Commission crackdown on crypto fraud and other scams.
According to this statement from Romero, most of the tips received this year involved crypto. Romero also described the crypto industry as “an area that continues to have pervasive fraud and other illegality”.
The commissioner also added that “with the rise of crypto, more retail customers have come under the CFTC’s jurisdiction”.
“[I’m] Very proud of these offices and their outsized results. As a former IG, I know firsthand how important whistleblowers are. The Commodity Futures Trading Commission could not fully protect customers and markets w/o them”
Romero also reported that out of the total $16 million paid out to whistleblowers, two of them received $15 million.
These whistleblowers’ information eventually led the CFTC to successful enforcement cases in September.
The Commodity Futures Trading Commission did not disclose the details of those cases. However, on the list of enforcement cases on the CFTC website, one of them in particular stands out:
According to this statement, the CFTC charged the company, “My Forex Funds” with fraudulently taking over $300 million from customers hoping to become professional traders.
Some of the CFTC’s Crypto Cases in 2023
As we mentioned earlier, in September, the CFTC charged “My Forex Funds” a $300 million case.
In July, the agency also sued two Delaware companies and had a Federal Court order it to pay nearly $146 million for fraud related to a precious metals scheme.
In June, the CTFC sued a man from Ohio for over $50 million for a Fraudulent Digital Asset Trading Scheme.
In a Bitcoin-related fraud prosecution against Benjamin Reynolds, who ran a Ponzi scheme called Control-Finance and duped over 22,000 investors, the Commodity Futures Trading Commission also secured a record $3.4 billion penalty payment in April.
Ultimately, one of the biggest cryptocurrency futures exchanges globally, BitMEX, was accused by the CFTC in October of running an unregulated trading platform and breaking regulations pertaining to client protection and anti-money laundering.
The Importance of Whistleblowers
It is possible that crypto has so many whistleblowers because of the outcome of the last bear market, where several crypto companies were forced to lay off thousands of employees.
These employees, who knew the inner workings of some of these companies would eventually become whistleblowers, as predicted in this tweet by Jake Chervinsky, the chief policy officer at the blockchain association.
Romero, the Commodity Futures Trading Commission Commissioner, also applauded the importance that whistleblowers play in assisting the CFTC.
She stated that the Commodity Futures Trading Commission couldn’t “fully protect” consumers and markets without whistleblowers, who are essential to reducing commodities fraud.
She concluded by saying that managing the risks associated with crypto is a crucial step to upholding the CFTC’s mission and vision.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.