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The United States commodities regulator has paid a total of $16 million this year to whistleblowers who provided crucial information leading to successful enforcement actions. Notably, the majority of these tips were related to the cryptocurrency sector.
In a statement released on October 31, Christy Goldsmith Romero, a commissioner at the Commodity Futures Trading Commission (CFTC), revealed that the CFTC had received numerous tips this year in the crypto space, an area that she described as “continuing to grapple with widespread fraud and other illegal activities.”
Interestingly, two whistleblowers were awarded a combined $15 million for their roles in providing information that contributed to successful enforcement actions in September. However, the CFTC did not disclose the specific nature of the cases in question.
Romero stressed the importance of whistleblowers in tackling commodities fraud, emphasizing that the CFTC would not be able to “adequately safeguard” customers and markets without their assistance:
“Whistleblowers play a critical role in identifying fraud and other illicit activities, providing key evidence, and helping conserve significant Commission resources and time. The sooner we can halt fraudulent activities, the more effectively we can protect customers from harm.”
Romero also acknowledged the efforts of the CFTC’s Office of Customer Education and Outreach, which is dedicated to educating individuals on recognizing, avoiding, and reporting cryptocurrency-related fraud.
“With the growing popularity of cryptocurrencies, more retail customers have come under the jurisdiction of the CFTC,” Romero noted.
Since its inception in 2014, the CFTC whistleblower program has paid out nearly $350 million. These payments have led to over $3 billion in enforcement sanctions imposed in cases initiated by whistleblowers.
Notably, the CFTC secured a record $3.4 billion penalty payment in an April case related to Bitcoin fraud. Additionally, the regulator won its case against Digitex CEO Adam Todd in July, resulting in a $16 million penalty.
Back in April, Romero stressed the importance of managing cryptocurrency-related risks to maintain market integrity, national security, and financial stability. She advocated for stronger identity verification measures to reduce illicit financial activities in the cryptocurrency market.
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