CFTC Calls on Whistleblowers to Report Virtual Pump-and-Dump Scammers

Last week the Commodities and Futures Trading Commission (CTFC) issued a customer advisory warning to the public about virtual currency pump-and-dump schemes. “As with many online frauds, this type of scam is not new – it simply deploys an emerging technology to capitalize on public interest in digital assets,” said CFTC Director of Public Affairs Erica Elliott Richardson. 

In a move to further protect the public, the CFTC publicly called for whistleblowers to report on those orchestrating the illegal pump-and-dump schemes, offering significant awards for information leading to successful enforcement actions. Whistleblowers who have original information that lead to monetary sanctions of $1 million or more, could be eligible for a monetary award of between 10 percent and 30 percent of the sanctions collected.

Individuals must file a Form TCR through the CFTC’s whistleblower program which allows for the payment of monetary awards to eligible whistleblowers.

Whistleblower attorney Stephen M. Kohn, praised the CTFC’s call for whistleblowers saying, “This is exactly the move necessary to encourage whistleblowers to come forward.” “Paying incentives to whistleblowers has proven to be the most effective way to stop unscrupulous thieves preying on customers,” continued Kohn, partner in the Washington, DC firm Kohn, Kohn & Colapinto and executive director of the National Whistleblower Center. 

More information: 

• CTFC Advisory: Blow the whistle on pump-and-dump schemers
• CTFC Press Release: CFTC Issues First Pump-and-Dump Virtual Currency Customer Protection Advisory
• Resources for Commodities Whistleblowers