CFTC Awards Over $1 Million for Crypto Trading Whistleblower Tip

CFTC recently awarded over $1 million to a whistleblower who reported "improper trading" activities in the crypto market. The tip led to an enforcement action by the CFTC.

Ian McGinley, the CFTC’s director of enforcement, revealed that most whistleblower tips last fiscal year were related to digital assets. He emphasized that addressing illegal activities in the digital asset sector is a top priority for the CFTC, noting that such cases made up nearly half of the agency’s workload in the past year.

The CFTC’s Whistleblower Program rewards individuals who provide information about violations of the Commodity Exchange Act (CEA) that result in successful enforcement actions with fines over $1 million.

Whistleblowers receive between 10% and 30% of the penalties collected. Since its inception in 2014, the program has issued about $380 million to whistleblowers and has led to $3.2 billion in sanctions.

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This year, the CFTC has taken several enforcement actions against crypto firms. In January, it filed a case against the exchange Debiex for alleged fund misappropriation.

In March, the CFTC and the Department of Justice indicted KuCoin and its founders for operating an unlicensed money transmission business and failing to adhere to anti-money laundering requirements. In May, the CFTC fined Falcon Labs nearly $2 million for operating without proper registration.

Alexander Stefanov