Crypto whistleblowers set for huge rewards from regulators

US regulators are offering to pay whistleblowers huge sums in the wake of the collapse of cryptocurrency exchange FTX.

A senior Commodity Futures Trading Commission official has urged those with information about industry abuses to come forward.

Commissioner Kristin Johnson said at a conference in London that informants would be given anonymity and paid handsomely.

“In the digital asset space, the value of having those vocal whistleblowers and tipsters is critical,” she added. “When it comes to payments to people that contribute to the CFTC’s ability to identify, investigate and prosecute cases, the numbers are very large.” US regulators are investigating Sam Bankman-Fried’s crypto empire and whether FTX misused clients’ funds.

The regulators overseeing the ruins of FTX have uncovered a staggering list of allegations against the company’s former leadership, denouncing non-existent governance and misuse of client money as it struggles to raise billions of dollars in locate missing assets.

John Ray, who was appointed liquidator of FTX last week, said the exchange’s financial controls and governance were worse than Enron’s. He told a US bankruptcy court: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial information as here.”

Ray oversaw the liquidation of the American conglomerate after its collapse in 2001. Enron’s bankruptcy wiped out the company’s £51 billion valuation.

US regulators are known for paying whistleblowers huge sums to prevent Enron from collapsing. Under CFTC rules, whistleblowers can get as much as 30 percent of the money the agency collects as fines for a case.

In October, the CFTC awarded £168 million to a former Deutsche Bank employee who raised concerns about the manipulation of the Libor interest rate benchmark.