This week, the U.S. Commodities and Futures Trading Commission (CFTC) published a warning regarding pump and dump manipulation schemes in the cryptocurrency space. In the warning, the CFTC offered whistleblowers as much as 30 percent on busts that collect more than $1 million USD.
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CFTC: “Submit a Tip”
The CFTC captured the hearts of many cryptocurrency enthusiasts days ago when its chairman, Christopher Giancarlo, made extremely warm remarks regarding the fledgling cryptoeconomy in the U.S. Senate’s first official hearing on cryptocurrencies.
Now? The CFTC is not capturing hearts, but crypto scammers. That’s per a new “Customer Advisory” just released by the Commission, wherein the watchdog declares it will be offering bounties to whistleblowers of pump and dump schemes.
Specifically, the advisory announced:
“Virtual currency and digital token pumpand-dump schemes continue because they are mostly anonymous.
If you have original information that leads to a successful enforcement action that leads to monetary sanctions of $1 million or more, you could be eligible for a monetary award of between 10 percent and 30 percent.
For more information, or to submit a tip, visit the CFTC’s whistleblower.gov website.”
There are two big takeaways here. First off, Chairman Giancarlo is approaching the cryptoverse exactly as he said he would during his recent Senate hearing — like a father. Giancarlo’s children are bitcoin investors, and he wants to see to it that innocent investors like his kids don’t get burned by brazen market manipulators.
Secondly, this advisory signifies that the days of unchallenged manipulation in the cryptocurrency ecosystem are over. Schemers may have anonymity at present, but they also have scrutiny now, too. And with scrutiny oftentimes comes de-anonymization.
And that’s when the prosecutions comes.
Watch Out for Fake News
“Fake news” has become a problem in crypto. The CFTC says as much in their new advisory, explaining that pump and dumpers typically rely on false reports to fuel pumps:
Some pump and dumps use false news reports, typically about a famous high-tech business leader or investor who plans to pour millions of dollars into a small, lesser known virtual currency or coin. Other fake news stories have featured major retailers, banks, or credit card companies, announcing plans to partner with one virtual currency or another. Links to the phony stories are also accompanied by posts that create false urgency and tell readers to buy now.”
We’ve all seen those ploys before. And now, with the CFTC’s whistleblower program, there’s an economic incentive to call foul.
What do you think? Have you ever seen a pumper at work on social media? Sound off in the comments below.
Images via CFTC, WSJ