On November 15, the U.S. Commodity Futures Trading Commission (CFTC) Whistleblower Program released its 2024 Annual Report. According to the report, the CFTC received a record 1,744 whistleblower tips in Fiscal Year 2024 and awarded over $42 million to whistleblowers whose disclosures resulted in approximately $162 million in monetary sanctions.

“Today’s report reinforces the importance of the CFTC’s whistleblower program to identifying fraudulent behavior in commodities and derivatives markets” said Andrew Feller, Co-Chair of Kohn, Kohn & Colapinto’s Securities and Commodities Whistleblower Group.”The impressive growth in the number of tips and award applications demonstrate the need to ensure that the CFTC’s program is adequately resourced so it can continue to play its vital role in protecting customers and market integrity.”

“The CFTC’s report confirms what the whistleblower community knows: whistleblower award programs generate massive income for the government, paid directly from fraudsters,” said KKC founding partner Stephen M. Kohn. “In FY 2024 the CFTC Whistleblower Office had a budget of only $3.595 million, but whistleblower cases resulted in $162 million in sanctions collected by the government. That’s a rate of return of over 4600%.”

“The CFTC Whistleblower Program continues to be a glowing success, but we are disappointed that more awards were not paid,” added Kohn. “Congress needs to fix the slow processing of awards. The CFTC program, along with similar programs administered by the IRS, SEC, and FinCEN, need to be fully supported with sufficient enforcement staffs in order that whistleblower cases can be processed quickly. We are aware of extremely meritorious award applications sitting in limbo for over 4 years.”

The CFTC Whistleblower Program’s record year underscores the growth and success of the program. However, the program is in danger of becoming a victim of its own success. A Congressionally-set cap on the fund used to finance the program has created a financial crisis where large awards could totally deplete the program’s funding. Emergency Congressional action is needed to address the problem and save the CFTC Whistleblower Program from financial collapse.

Once again, the largest portion of CFTC whistleblower tips related to cryptocurrency and digital assets fraud, including pump and dump schemes and refusals to honor customer requests to withdraw funds. Other areas of fraud reported in whistleblower tips include registration violations, insider trading, spoofing, and market manipulation.

Geoff Schweller also contributed to this article.