Article by John Joy, Managing Attorney, FTI Law.
SEC Crypto Whistleblower Rewards
The SEC operates a whistleblower reward program for people reporting fraud or crime involving “securities.” The SEC believes that some contracts to buy cryptocurrencies are “securities.” If you know about a person or company fraudulently selling cryptocurrencies (through an ICO for example) in the U.S. you may be eligible for an SEC whistleblower award for reporting it. However, more than just general knowledge is usually required to become an SEC whistleblower, and if you are a victim of crypto fraud, the SEC whistleblower program is likely not a good avenue to seek recovery of your funds. If you have information relating to a fraudulent crypto currency sales, you should speak to a local attorney to determine whether you might be able to report it. Whistleblowing is typically only a suitable avenue for people who have inside information about a fraudulent scheme, such as people who work with or as part of a crypto project. Please note, FTI Law cannot help you if you have lost money in a crypto scam, or are having difficulty withdrawing funds from a crypto project.
CFTC Crypto Whistleblower Rewards
The CFTC operates a whistleblower reward program for people reporting fraud or crime relating to “commodities.” The CFTC considers many cryptocurrencies, including Bitcoin, to be commodities. If you know someone who was fraudulently trading or selling cryptocurrencies or crypto derivatives (futures) you may be eligible for a CFTC whistleblower award. If you have information relating to a fraudulent crypto currency sales, you should speak to a local attorney in your jurisdiction to determine who best to report it to. Please note, FTI Law cannot help you if you have lost money in a crypto scam, or are having difficulty withdrawing funds from a crypto project.
IRS Crypto Whistleblower Rewards
The IRS operates a whistleblower reward program where people reporting tax evasion involving crypto currency can receive up to 30% of any fines recovered by the IRS. Many people evade tax using cryptocurrencies by not declaring their profits from trading cryptocurrency, or using cryptocurrency to hide assets. In either circumstances, this can be a violation of U.S. tax law and by reporting it you could be entitled to a multi-million dollar award from the IRS. As with the other whistleblower programs, IRS whistleblower awards are paid to the first person who reports the violation.
