CFTC recently granted more than $1 million to a whistleblower who disclosed “improper trading” activities in the cryptocurrency market. The CFTC implemented an enforcement action as a result of the information.
Last fiscal year, Ian McGinley, the director of enforcement at the CFTC, disclosed that the majority of whistleblower reports were associated with digital assets. He emphasized that the CFTC’s top priority is to address unlawful activities in the digital asset sector, citing that these cases accounted for nearly half of the agency’s caseload in the previous year.
The CFTC’s Whistleblower Program provides individuals with penalties exceeding $1 million for providing information regarding violations of the Commodity Exchange Act (CEA) that result in successful enforcement actions.
Whistleblowers usually receive 10% to 30% of the penalties that are collected. The program has resulted in $3.2 billion in sanctions and issued approximately $380 million to whistleblowers since its inception in 2014.
The CFTC has implemented various enforcement actions against cryptocurrency firms this year. In January, it made a complaint against Debiex, an exchange, for alleged fund misappropriation.
The CFTC and the Department of Justice indicted KuCoin and its founders in March for operating an unlicensed money transmission business and failing to comply with anti-money laundering regulations. The CFTC imposed a nearly $2 million sanction on Falcon Labs in May for operating without proper registration.
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