- November 22, 2022
- By: Admin1_blog
- Crypto Market
A CFTC commissioner has urged crypto industry whistleblowers to come forward in the aftermath of FTX Group’s implosion, saying tipsters have previously received millions of dollars for their help.
Commodity Futures Trading Commission’s Kristin Johnson said on Thursday that informants would get anonymity, adding that such tips play a crucial role in enforcement given the opaqueness of some of the crypto world.
“In the context of the digital-asset space, the value of having those vocal whistleblowers and tipsters is critical,” Johnson said in an interview on the sidelines of a City & Financial Global conference in London, adding that crypto frauds can be “heartbreaking.” When it comes to payments to people who contribute to the CFTC’s ability to identify, investigate and prosecute cases, “the numbers are very big,” she said.
Under the CFTC’s rules, whistleblowers can get awards worth between 10% and 30% of the money the agency collects in penalties from a case. The regulator awarded nearly $200 million to a single unidentified whistleblower in the 2022 fiscal year, the largest amount granted under the Dodd-Frank Act by the CFTC or Securities and Exchange Commission, the regulator said in a statement last month.
Johnson added that the appeal was intended “very broadly” and not just for FTX. “All we can do is put out the call because if someone is allowed to get away with it having done it once they will do it again.”
US regulators are investigating whether FTX.com mishandled customer funds, and they’re looking into the firm’s relationships with other parts of Sam Bankman-Fried’s crypto empire. The inquiries by the SEC and the CFTC relate to the liquidity crisis that has pushed FTX to the brink, Bloomberg News reported last week.
Advisers overseeing the ruins of FTX have laid bare a stunning list of allegations against the company’s former leadership, slamming non-existent oversight and the misuse of client funds as they struggle to locate billions of dollars in missing assets.
Johnson suggested that lawmakers should expand the jurisdiction of the CFTC to cover the spot market, and to make sure it can act if its believes that US customers or markets could be affected by activity on a platform outside the US.
“It is ever more critical that we are vigilantly closing those regulatory gaps, tightening and weaving together the spaces where actors might act in the shadows,” she said.