CFTC pays hackers $16M this year for most crypto tips
The U.S. commodity regulator paid $16 million this year to whistleblowers who provided information leading to effective enforcement action on most crypto tips.
In an Oct. 31 statement, Commodity Futures Trading Commission (CFTC) Commissioner Christie Goldsmith Romero said most of the recommendations she received this year involved crypto, which she called “an area with widespread fraud and other illegalities.”
They are very proud of these offices and their excessive results. As a former IG, I know firsthand how important whispering is. The CFTC has failed to fully protect consumers and markets. Click to read about top # tips, crypto tips and local cheat tips. https://t.co/C4I9tgnxRU
— Commissioner Christie Goldsmith Romero (@CFTCcgr) October 31, 2023
Two whistleblowers who received $15 million for their information alone led the CFTC to successful enforcement cases in September — however, the regulator did not examine the nature of those cases in a statement at the time.
Romero said indicators are critical to combating commodity fraud and that the CFTC cannot “fully protect” clients and markets without them.
” Hackers help detect fraud and other illegalities, interpret key evidence and save the commission a lot of resources and time. The faster we detect fraud, the better we can protect customers from harm.”
Romero acknowledged the efforts of the CFTC's Office of Consumer Education and Outreach, which educates people to identify, avoid and report cryptocurrency scams.
“With the rise of crypto, many retail clients have come under the jurisdiction of the CFTC,” Romero said.
Related: CFTC issues $54M default judgment against trader in crypto fraud scheme
In the year Since the program began in 2014, the CFTC has disbursed nearly $350 million. More than $3 billion in enforcement sanctions have been flagged by fraudsters.
In April, the CFTC won a $3.4 billion settlement in a Bitcoin-related fraud case, and in July it won a case against Digitex CEO Adam Todd, who was ordered to pay a $16 million fine.
In April, Romero stated that managing the risks associated with cryptocurrencies will be critical to maintaining market integrity, national security and financial stability.
She advocated the integration of strong identity verification measures, saying it would reduce illegal financing in the cryptocurrency market.
As the bear market escalates, many crypto companies have to lay off employees to keep the lights on.
This creates a new risk: Disgruntled former employees often become whistleblowers, especially if they have valuable intel that could lead to an SEC or CFTC bonus award.
— Jake Chervinsky (@jchervinsky) December 29, 2018
Magazine: Crypto Regulation: Does SEC Chairman Gary Gensler Have Final Comments?
