The law firm of Kirby McInerney LLP encourages cryptocurrency whistleblowers to contact the firm if they have knowledge of manipulation of and misconduct in the cryptocurrency markets.
For participants in the cryptocurrency markets, there is much cause for alarm of late. The catastrophic FTX bankruptcy highlights the cryptocurrency market’s susceptibility to fraud given its unregulated nature, and the fact that much of it is ostensibly overseas and otherwise opaque in its mechanics. In the face of this, investors are susceptible to exploitation and losses. In the case of FTX, investors and creditors are owed billions of dollars according to initial filings in the bankruptcy proceedings. FTX may be just the start of things.
How can regulators get insight into the crypto space and into the FTX situation in particular? In a word, whistleblowers. One regulator, the Commodity Futures Trading Commission recognizes as much. According to Bloomberg, the CFTC commissioner Kristin Johnson has said whistleblower tips could be critical for regulators to identify misconduct. She noted that the crypto world is not one easily understood from the outside.
The inability of regulators to easily oversee this market is demonstrated by their unprecedented public request for whistleblowers to help. To incentivize these whistleblowers, Ms. Johnson notes that they would be entitled to a significant percentage of any fine or levy based on any helpful information that the whistleblowers provided. These incentives are codified in the Dodd-Frank whistleblower laws brought into effect in 2010, which allow a whistleblower to receive 10 to 30% of the fines or levies that the regulators obtain. The CFTC alone has received an estimated $3 billion in fines and levies because of whistleblower tips and has paid out approximately $300 million to whistleblowers since the beginning of the CFTC’s whistleblower program.
The incentives work and the regulators are advertising them in order to get ahead of a problem in the crypto space that they are currently chasing.
An important additional dynamic in the case of this sort of fraud is that whistleblowers can do more than just help regulators. They can help investors too. In the bankruptcy of FTX, whistleblowers who have information about the location of assets can add to the money available to creditors who now appear to be looking at losses of nearly their entire investments.
Another way to put this is that the contribution of whistleblowers is salutary to investors as well regulators. This could be especially true in the case of FTX.
If you have information concerning misconduct in the cryptocurrency space, or would like to learn more about your options and incentives for whistleblowers, please contact David Kovel of Kirby McInerney LLP or fill out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in whistleblower, securities, and consumer litigation. David Kovel and Kirby McInerney represented an individual CFTC whistleblower who received nearly $200 million, which represents the largest-ever individual whistleblower award arising under the Dodd-Frank whistleblower reward programs. Additional information about the firm can be found at Kirby McInerney LLP’s website.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
View source version on businesswire.com: https://www.businesswire.com/news/home/20221122005769/en/
Kirby McInerney LLP
David E. Kovel, Esq.