SEC Enhances Crypto Whistleblower Reward Program

The US Securities and Exchange Commission (SEC), amid tightening regulation of the crypto industry, is expanding the conditions under which a whistleblower will receive a reward from the regulator.

SEC Chairman Gary Gensler announced that the regulator has amended the rules governing the whistleblowing program in the crypto industry:

“We have voted to amend the rules governing our whistleblowing program. I was happy to support these amendments because they ensure whistleblowers receive appropriate rewards for reporting potential violations of the law.”

The head of the SEC said that these are two changes that, in his opinion, will provide an opportunity to improve the program for reporting violations of the securities law. First of all, the SEC expands the circumstances under which a whistleblower can receive a reward from the regulator.

The commission has the authority to consider and adjust the amount only in the direction of increasing the amount of remuneration. According to Gensler, this will give whistleblowers additional guarantees that the Commission will not reduce the reward for information about offenses in the crypto industry.

Gensler said the outreach program, created in 2010, “greatly helped” the SEC achieve its goal of protecting investors. SEC
spent about $1.3 billion in whistleblower rewards. Through the program, the SEC issued more than $5 billion in fines to securities law violators and was able to return more than $1.3 billion to investors.

Recently, a Forbes journalist criticized the SEC’s approach to regulating cryptocurrencies. According to her, the number of cases settled by the American regulator in relation to crypto companies testifies to the arbitrariness of the department.