cryptocurrency pump and dump

Whistleblower Awards From Cryptocurrency Pump and Dump Schemes

by William Restis

published February 19, 2018

So it looks like the Commodities Futures Trading Commission (CFTC) is taking a hard look at cryptocurrency pump and dump schemes. And its offering awards to whistleblowers of 10 to 30 percent.

That’s good, because manipulation has always been one of my chief concerns about crypto markets. Consider that market manipulation is generally illegal in the United States. It’s unlawful to disseminate false or misleading information in securities markets. The same prohibition extends to commodities markets as well. But crypto is a different story because regulators haven’t officially subjected it to a specific legal category. So market manipulators have had free reign. Until now that is.

The CFTC has announced that people coming forward with “original information that leads to a successful enforcement action [with] monetary sanctions of $1 million or more” may be awarded up to 30 percent of the sanction. And while the CFTC announcement specifically mentioned pump and dump schemes, any evidence of market manipulation could lead to a whistleblower award.

Whistleblower claims have many technical requirements that must be met in order to be eligible for an award. If a whistleblower doesn’t check all the right boxes, too bad. So get a good attorney if you have information on a pump and dump scheme. It could mean the difference between being a good samaritan and being a rich one.

I’m not your attorney, and this is not legal advice. It’s just my blog.

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