That’s what you call pinpoint timing. While bankrupt exchange FTX and the Commodity Futures Trading Commission (CFTC) reached a court-approved $12.7 billion settlement, the federal agency offered a $1 million reward to a whistleblower who provided information about a crypto exchange.
CFTC Pays $1 Million Reward to Informant
This Thursday, The U.S. Commodity Futures Trading Commission (CFTC) has announced a reward of more than $1 million to a whistleblower. The latter “ provided critical information and significant assistance that enabled the independent federal agency responsible for regulating securities exchanges to bring an enforcement action related to the digital asset market “.
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According to the CFTC filing, 6 people tried to help the agency with this investigation. Only one of them provided information. sufficiently precise, credible and timely » allowing legal proceedings to be initiated.
For Brian Young, director of the CFTC's whistleblower office, ” Whistleblowers play increasing role in CFTC digital asset enforcement actions » .
Since the passage of the Dodd-Frank Act in 2010, The CFTC has the ability to rely on whistleblowers as part of its regulatory operations. That is why, in 2014, the agency set up a whistleblower program.
In 10 years, $380 million awarded to whistleblowers who have the possibility of receiving a reward of between 10 and 30% of the amount of fines imposed on the companies incriminated. Thanks to this program, dozens of legal proceedings have been initiated, resulting in financial sanctions totaling $3.2 billion.
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A curious timing to say the least
CFTC Enforcement Director Ian McGinley commented on the whistleblower program:
“Identifying illicit conduct in the digital asset market is a top priority for the CFTC, especially as Americans increasingly fall victim to digital asset scams. In the last fiscal year, digital asset cases accounted for nearly 50 percent of the CFTC’s caseload, and the majority of reports that year involved digital assets.”
The CFTC did not specify which cryptocurrency industry player it was referring to.. However, the timing of his announcement does not seem insignificant.
In fact, the regulator is ready to receive $12.7 billion from FTXthe cryptocurrency exchange platform that went bankrupt in November 2022. Indeed, the two entities managed to find common ground after 20 months of procrastination..
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The agreement was validated by the New York court. Of the $12.7 billion paid, $8.7 billion is a restitution fee that will be used to reimburse users of the platform harmed by the situation.The remaining $4 billion is a fine for the fraudulent gains made by FTX.
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Source: Commodity Futures Trading Commission
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