The Commodity Futures Trading Commission received a record number of tips from whistleblowers this year—and most were related to crypto, according to Commissioner Christy Goldsmith Romero.
The federal agency, which oversees commodities and has some regulatory power over crypto, has paid out $16 million in incentives to whistleblowers in 2023. The 1,530 tips it received are the highest of any year, according to the statement released on Tuesday.
“With the rise of crypto, more retail customers have come under the CFTC’s jurisdiction, making even more critical the efforts of the CFTC’s Whistleblower Program and the Office of Customer Education and Outreach,” Goldsmith Romero said in the statement.
Whistleblowers are eligible to receive between 10% and 30% of any monetary sanctions collected, according to the CFTC.
Very proud of these offices and their outsized results. As a former IG, I know firsthand how important whistleblowers
— Commissioner Christy Goldsmith Romero (@CFTCcgr) October 31, 2023
are. The CFTC could not fully protect customers and markets w/o them. Click to read about the highest # of tips, crypto tips & environmental fraud tips. https://t.co/C4I9tgnxRU
The $16 million in incentives paid out included a $15 million payout to two whistleblowers “who provided significant information and assistance that led the CFTC to bring separate successful enforcement actions.” Additional details about the cases were not disclosed.
Since incentive payments to whistleblowers were established with the passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, the CFTC has awarded nearly $350 million. The information provided by whistleblowers has led to enforcement actions resulting in sanctions of more than $3 billion, according to the agency.
The CFTC has stepped up enforcement actions related to crypto in 2023. In March, the agency brought charges against top crypto exchange Binance and CEO Changpeng “CZ” Zhao. Those charges were followed by a lawsuit the agency brought in October against Voyager Digital’s former CEO and cofounder, Stephen Ehrlich, who the agency alleges misled customers about the safety of assets held on the platform.
It’s unclear if whistleblowers were involved in either lawsuit. Still, Goldsmith Romero said giving protection and incentives to those with helpful insider information helps the agency identify fraud and other crimes, as well as interpret key pieces of evidence.
“The CFTC,” she said, “could not fully protect customers and markets without whistleblowers.”
