SEC pays whistleblower $279 million over crypto industry disclosures

The Securities and Exchange Commission (SEC) has set up an incentive mechanism as part of its mission. It consists of rewarding anyone who provides information on crypto firms, allowing them to impose their rules. Every year, the SEC spends millions of dollars for this purpose.

$279 million reward for a single informant: an absolute record!

The SEC published a statement on Friday, May 5, in which it announced that it had paid for the services of an anonymous informant. The latter alone benefited from some $279 million. This figure is much higher than the $229 million paid in 2022 to reward 103 informants. Above all, the amount sets a new record award given to a single individual. The last being $114 million made in 2020.

It must be said that the operation is in line with the Dodd-Frank Wall Street Reform and Consumer Protection Act. This is a law, passed in 2010, with the aim of protecting consumers against abusive financial practices.

Thus, these regulations allow the SEC to encourage anyone who can, to report violations of its rules. A way for the regulator to effectively advance the files that involve it. One thinks particularly of breaches of securities law.

If this information is relevant and if thanks to it, the SEC wins a case, the informant is rewarded. The latter then receives a bonus. She is worth 10-30% of the monetary penalties of over $1 million collected.

A way for the SEC to corner crypto firms?

Regarding the reward given to the anonymous informant, Gurbir Grewal, the SEC’s chief enforcement officer said: “Today’s award amount, the highest in our program’s history, not only incentivizes informants to provide accurate information about potential violations of securities laws, but also reflects the ‘huge success of our whistleblower program’.

Could this be how several crypto firms like Ripple or Coinbase found themselves in the crosshairs of the SEC? The doubt is whole given the anonymity that surrounds the identity of the informant in question. It is nevertheless a completely conceivable track given the extent of the witch hunt of which these companies are the object.

Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of newsletter daily and weekly so you don’t miss any of the essential!

Similar Posts