Before the Congressional recess, Sen. Chuck Grassley (R-IA) questioned the CFTC Chairman on whistleblower protections during a Senate Agriculture Committee hearing.
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NewsTranscript
00:00Senator Grassley. Thanks to both of you for your courtesy. I have a non-crypto question that you probably would expect me to ask.
00:09Before I ask that question, last Congress I led a temporary fix that ensures the CFT whistleblower program continues to operate and make whistleblower awards.
00:24At the end of this fiscal year, the fix expires, putting the program at risk.
00:30That's why I introduced a permanent bill with several of my colleagues, including Senators Hassan, Boozman, Warnick, Collins, and Fetterman.
00:41Our CFTC Whistleblower Fund Improvement Act aims to make the administrative fix permanent and allow the CFTC to hold as much in fines as we allow the Security and Exchange Commission to do.
00:59Without a fix, the program could become a victim of its own success through accounting snags, even as it continues to bring in fines.
01:08You know how important it is to listen to whistleblowers, because even though you may have a relatively small agency compared to others, you can't know what's going on.
01:19Outside of your agency, you can't know.
01:23Chairman Benham, what would happen to the CFTC whistleblower's office if Congress fails to act before October?
01:32Senator Grassley, thanks for the question.
01:34Before I respond, I just want to thank you for your leadership on this particular area.
01:39It's extremely important.
01:40As much as you say it's not necessarily crypto-related, it is in many respects, because so many of the enforcement cases that we're seeing in this space are driven through or could originate from the whistleblower office.
01:51Ultimately, if this fix is not made permanent, and I hope it is in fact made permanent as soon as possible, this will have a very negative impact on our ability to both staff the whistleblower office, to ultimately fund it, and to be able to get word out to the general public about what the whistleblower process is, the awards that can be awarded, essentially, and the protections that are also afforded.
02:15As you pointed out, our success has been really the detriment of this program itself.
02:22The past 10 to 15 years since Dodd-Frank, after the financial crisis, has demonstrated the whistleblower office's outstanding success.
02:32I think there's a lot of trust from the agency with industry stakeholders and market participants.
02:38We've seen $100 million whistleblower awards be paid out, which is really the issue and the reason why we're talking about this right now.
02:46Ultimately, it's our enforcement program, the size of our markets, and the ability to receive these tips and complaints, and to have incentives for whistleblowers to bring this information to us.
02:57Without that, as you point out, given our size, and regardless of federal agency, small or large, there's only so much we can see in the marketplace.
03:06We only have so many tools, so having this public-private partnership, in a sense, is extremely important to ensure transparent and fair markets.
03:15I would ask you and the committee to continue thinking about this.
03:20We are here at any moment to help with technical assistance, but in order for the CFTC to continue to be successful and the whistleblower program to be successful,
03:28this fix is extremely important, because ultimately, the payouts continue to grow, and if they do, it's going to put the office in jeopardy from a staffing and a resource perspective.
03:38I thank you for your very firm statement on the urgency of this legislation.
03:45I'm glad to have this opportunity that you're here to draw attention to the CFTC's Whistleblower Fund Improvement Act.
03:53This is something that we've got to work on and get passed by September 30th.
04:00Thank you, Senator.
04:01Thank you. I yield back my time, and I thank Senator Boozman.
04:07Well, thank you very much.