Blowing the Whistle on Misconduct in Crypto

Whistleblower offices at the SEC and CFTC have made a difference

Letter to The WSJ.

"Sen. Elizabeth Warren’s op-ed, “Regulate Crypto or It’ll Take Down the Economy” (Nov. 23) misses one important safety feature in existing Securities and Exchange Commission and Commodity Futures Trading Commission regulations: whistleblower programs that encourage those with knowledge of wrongdoing to step forward and report to federal regulators.

The 2010 Dodd-Frank Act established whistleblower offices at both agencies. These offer confidentiality to whistleblowers and the potential for large financial rewards, as much as 30% of monetary sanctions collected.

Of the more than 12,000 SEC whistleblower complaints received in financial year 2022, the third-most common concerned wrongdoing by the crypto industry. Likewise, the majority of whistleblower submissions the CFTC received in the past year concerned crypto and digital assets.

Over the past decade, SEC enforcement actions originating from whistleblower information have led to enforcement orders of more than $6.3 billion, of which more than $1.5 billion will be or has been returned to investors. Add $3 billion more from the CFTC.

Erika Kelton

Partner, Phillips and Cohen LLP

Washington"