00;00;00;00 - 00;00;32;21 Unknown Hi, welcome to the podcast hosted by the Association for Women in Cryptocurrency, sponsored by Bracewell LLP. Bracewell is a leading law and government relations firm whose award winning teams lead the market in cutting edge transactions and litigation regulatory matters and government relations. You can learn more at Bracewell dot com. Our third episode today is crypto whistle blowers. Anything and everything we want to know about the process, why it's important. 00;00;32;23 - 00;00;58;14 Unknown The association is a global professional network of women and male allies around the world who advocate for the equitable Inclusion of women in the future of digital finance, blockchain technology and web3. The views of the speakers are their own and do not necessarily represent those of the association. Its sponsors or its board of directors. This podcast is our opportunity to showcase the incredible work being done by our members around the world in the crypto, blockchain and Web3 industries. 00;00;58;15 - 00;01;27;12 Unknown I'm your host, Amanda Wick, founder and CEO of the Association for Women in Cryptocurrency, and I'm incredibly excited to introduce you to Liz Pendleton and Juliana Andoni, an expert in the field of crypto whistleblowing. We could not have two better people here to chat with us. So, Juliana, why don't we start the introductions with you? Sure. I'm an attorney at Levy Firestone Muse LLP in Washington, DC, where we represent crypto whistleblowers who can find out more about our work on crypto whistleblower BBC.com. 00;01;27;14 - 00;01;48;23 Unknown In addition to that, work, we also do congressional investigations into investigations, white collar representation, personal injury. So it's really it's never boring. I remember a past life that included many of those things, so not boring was probably the best description I've ever heard of it. So, Liz, why don't you just yourself. Hey, Amanda. It's great to be here today. 00;01;48;23 - 00;02;13;05 Unknown Thank you for having me. I am Liz Pendleton. I am a chief trial attorney with the Commodity Futures Trading Commission, our CFTC Division of Enforcement. I am in our Chicago office and have represented the commission in a number of matters in the digital asset space, including our actions against Binance's attacks. Tether and BitMEX. And I spent about three years as the co-chair of our Digital Asset Task Force. 00;02;13;12 - 00;02;30;15 Unknown Because I am a government employee, I have to give the standard disclaimer. Those of you that hear government speak are going to be well familiar with this. But it's important to say that my remarks here today are my own, and any opinions I express do not necessarily reflect the views of the division, the commission, or the United States government. 00;02;30;17 - 00;02;54;16 Unknown I remember that warning well. So I like you. I always forgot to give it. I am impressed. No, but I. I'm so excited to have you two here in the prep session. I learned a ton, and so I can't wait to kind of have the folks listening. I think this is a fascinating area that's not talked about enough, so we are incredibly excited to have you decrypt crypto whistle blowing. 00;02;54;21 - 00;03;15;28 Unknown So I want to jump right in. And Juliana, I know you mentioned a variety of things that your firm does. I was surprised. I thought I knew the areas that have whistleblowers. But it's not just crypto. But if you could just talk about what kind of areas of law have had whistleblowers or what do you guys see in terms of I'm kind of like, where do the claims come from? 00;03;16;00 - 00;03;34;05 Unknown So this a lot of areas of law that have whistleblowers, one that a lot of folks are familiar with, this false claims act where people are defrauding the government and there's a reward for folks who come forward with that information. Within crypto whistleblowing, my colleague Darren Firestone calls us crypto bounty hunters, which is a nice way of putting it. 00;03;34;05 - 00;03;54;24 Unknown We try to collect whistleblower bounties for our clients in return for exposing fraud, money laundering, market manipulation and tax evasion. I think he just thinks that would be a fantastic television show and I do not disagree. So we should we should work on that. He is a former actor, so I do not do that. That is so fantastic. 00;03;54;27 - 00;04;13;25 Unknown But that does explain his fantastic flair for drama, which is clearly evident inside of what you do. And I will say, having done health care fraud, I think that is most people's perception, like the False Claims Act stuff and health care fraud, I think tends to get a lot of the love and awareness or I think tax like the IRS tax whistleblower program. 00;04;13;27 - 00;04;41;01 Unknown So I'm excited to talk with you guys about the lesser known whistleblower programs like crypto and a few others. So, Liz, since we have you and you work with the CFTC. Can you tell us like what kind of specific claims the CFTC looks at? And are there certain types that are, we'll say, more valuable than others? Sure. So we will obviously look at any whistleblower claim that comes in the door and the number of claims that we are getting has increased exponentially in recent years. 00;04;41;02 - 00;05;06;18 Unknown Mean I think we had over 1500 whistleblower complaints that were filed in the last fiscal year, in fiscal year 2023. But there are certain categories of whistleblowers that tend to be more valuable. In particular, insiders are a category of whistleblower that can be very beneficial to us. You know, to take a step back, that's kind of core tenet of being a whistleblower is being able to provide information that is original. 00;05;06;18 - 00;05;24;18 Unknown And so for original information, we look at information that is specific, timely and credible, and insiders that have personal knowledge. The course of conduct are often incredibly helpful in what they can share. But the other category that's really valuable that I don't think people are quite as aware of are people that can crunch the data, particularly in the crypto space. 00;05;24;23 - 00;05;47;29 Unknown You know, there is so much out there on blockchains and other mediums where publicly available data, but it's not data that we may necessarily be aware of or be aware of what it needs. So someone's able to identify abnormalities and perform an independent analysis and provide it to the CFTC or to another financial regulatory agency. That's something that is often viewed as being really helpful. 00;05;48;04 - 00;06;06;26 Unknown You know, we have a subcategory of whistleblower clients who I would maybe would call sophisticated victims who they have been that they have been the target of fraud in the crypto space, and they have decided to figure it out. And because of blockchain tracing that, there's there's an opportunity in crypto where if you were a victim of a fraud in different way, it might be different. 00;06;06;26 - 00;06;34;24 Unknown And so they're able to sort of amass, amass information and trace and join together. And sometimes come to us with sort of a profile that they've developed. So I was going to say something else, but you kind of turned it into a very a question now, which is like in my mind, when Liz said that I was thinking of some of the folks like on crypto Twitter who are just out there investigating these things, kind of like, you know, at home kind of do it yourself or because the blockchain is so visible. 00;06;34;28 - 00;06;53;11 Unknown And I guess my question is, is would you have to be a victim? Or if you're just like a person sitting at home with blockchain analytic skills, could you be a whistleblower on activity that you just find the latter? So I'm shaking my head, but not everyone's watching video. You can be so you don't have to be. You certainly don't have to be a victim. 00;06;53;11 - 00;07;15;22 Unknown You can be someone who is able to create an analysis based on your deep life in crypto, Twitter, or whatever tools you have, and that also can qualify as visual information. I don't think a lot of people think about that. And I know I've seen on crypto Twitter where kind of like fun paths have been disclosed or people have said like, Hey, I followed this money and it's sitting in this address right here. 00;07;15;22 - 00;07;30;22 Unknown And so I think some of those people don't realize there could be a benefit to coming forward and saying, I did all this work, maybe I get paid. And I love that they're not thinking about the payment. Maybe they don't know it's an option. But I do think a lot of people don't realize that you don't have to be a victim to be a whistleblower. 00;07;30;27 - 00;07;47;22 Unknown But that does bring up a really good question, which is so who can and can't be a whistleblower? Are there things that disqualify you are like are there things that people think you can't be but maybe give me like who falls into that bucket of who can and can't be a whistleblower? Let me maybe I'll start with you and then Juliana, if you want to add something. 00;07;47;24 - 00;08;13;13 Unknown Sure. So as to the CFTC's program, you know, I think one of the big misconceptions is that you have to be a U.S. citizen. You don't anyone can be a whistleblower. You can be anonymous. We take a lot of steps to protect the confidentiality of whistleblowers. And Julianna and her firm, I think, can speak to that as well, because often individuals that are represented by counsel may have an additional level of protection in their minds, at least, you know, additional level of comfort. 00;08;13;13 - 00;08;42;23 Unknown But you can certainly be anonymous. You can have some involvement in the scheme. But if you are blowing the whistle on a course of conduct that you are ultimately convicted of a crime in connection with, you cannot be a whistleblower. And it is it is fair to say that if there is a whistleblower that is involved in misconduct or has some degree of unclean hands, that will likely be taken into account when the award itself is determined and the amount of the award You also can't be a CFTC employee or an SCC employee or DOJ employee. 00;08;42;23 - 00;09;04;09 Unknown So it's going to be a play on words. We're going to know. And the last thing is you can't be a whistleblower if you knowingly make false statements in your whistleblower application that will preclude you from receiving an award. And you mentioned like you can't be a what I'll say is like a criminal coconspirator or maybe like involved in the crime. 00;09;04;11 - 00;09;24;25 Unknown What about people who have felonies from completely unrelated things like if you're a past felon, you're shaking your head. No, no, that's not a that won't preclude you. So under. Really? Yeah, it's in our regs. I believe it's regulation 165. It enumerates sort of who can and can't be a whistleblower. And that is not one of the categories that is laid out. 00;09;24;25 - 00;09;46;10 Unknown It's misconduct and conviction of a crime that is specifically related to that matter in which one has become a whistleblower. interesting. I realize I said that with a level of excitement as if I had a felony and had been thinking a whistleblower. So I just was like, That's great, because sadly, I think felons are barred from too many things after they've done their time and paid their debt to society. 00;09;46;10 - 00;10;06;08 Unknown So it's actually really reassuring to know that they can still participate in this process, which I think is really valuable. So, Julianne, I know I tend to think about the whistleblowing process in the U.S., but I think one of the things I was really surprised to learn when we were talking earlier was that other countries have whistleblowers and that we can even participate in some of those. 00;10;06;08 - 00;10;27;05 Unknown Can you can you tell us a little bit about that? They sure do. And it goes both ways. People outside the U.S. can participate in the U.S. cases that have U.S. jurisdiction and vice versa. So we other countries that have whistleblower programs in this context include South Korea, Germany, the UK and Canada. And we have filed on behalf of clients with agencies in those countries. 00;10;27;09 - 00;10;46;19 Unknown I imagine with everything happening with MEKA and the FCA in the U.K., that you guys will probably maybe even see a pickup in the U.K. that just fascinated me because it just never occurred to me that you could be a whistleblower in a foreign country. I think sometimes we think a little insular, if that's a word. I thought that was super fascinating. 00;10;46;21 - 00;11;06;05 Unknown One of the questions I imagine people would have is, let's say I think something's not right or I'm not even sure if the activity that I'm seeing would qualify as something that would rise to the level of whistleblower status. Where would I start? Like, if I'm if I'm just worried about something, I'm seeing my company. How does the process start? 00;11;06;05 - 00;11;30;05 Unknown If someone thinks that they might have a whistleblower claim? So you're welcome to reach out to us. Could do that. I walked right into that way. Okay. This is like, Wow. And people can start with us anonymously as as well. We're happy to correspond and signal, etc. and and stay anonymous until they can give you more information. If it's a case we can take. 00;11;30;05 - 00;11;47;00 Unknown And it's maybe a point for us, to me, to talk just a little more about what we look for in evaluating claims in order to recover as a whistleblower, recover funds, you have to have a solid target. So if it's a company that's gone completely bankrupt or it looks like there's no funds, that may be a reason that it's going to be harder to go forward. 00;11;47;03 - 00;12;13;16 Unknown In the US context, we look for connections with the U.S., either U.S. users, U.S. victims. Because of what crypto is. There's frequently U.S. users are U.S. victims, even if it's an exchange elsewhere, etc.. And then we want good information, original information, either inside or sophisticated analysis from the outside. And then also we generally do this case on contingency, which means for non-lawyers, we don't take any money at the beginning and we take a portion of the recovery if there is one. 00;12;13;16 - 00;12;37;08 Unknown And so for that reason, among many others, we are selective about the cases that we we take and we bring to government agencies. I should note people don't need a lawyer to go forward to government agencies, but it can often be a very helpful part of the process. And just to play off on that point and to take advantage of the opportunity to plug the CFTC's website, which is whistleblower dot gov and is kind of full of information about our program. 00;12;37;08 - 00;13;00;06 Unknown But one can submit a whistleblower tip. We have forms that are called tickers, which stands for tip complaint or referral, so you can submit a TCR as an individual without going through counsel. Through our website, you can submit a TCR anonymously. And I would encourage individuals, if you see something that you feel is really problematic and likely a violation of the law to submit a. 00;13;00;06 - 00;13;24;25 Unknown TCR And one of the challenges is time, because in order to become a whistleblower, you have to provide original information that is unknown to us, or at least aspects of which are unknown to us. So it is not uncommon, in my experience, for us to receive whistleblower complaints. And unbeknownst to the whistleblower, we are months into an investigation of this entity and what they are telling us is something we have already ascertained through other avenues. 00;13;25;01 - 00;13;46;12 Unknown The second aspect that I would highlight is, you know, at the CFTC, and I believe this is true for most, if not all, other agency's enforcement divisions, we have a robust triage program and our triage unit evaluate ATES and reviews the leads that come in. And if they see something that isn't quite right for us, it is not uncommon for us to refer it out to the appropriate agency. 00;13;46;15 - 00;14;07;13 Unknown There's some obviously tricks there with whistleblowers and making sure we are retaining the confidentiality of the whistleblower and making sure that we're following all the steps there. But that is an option as well. Okay. There was something was there was something that you said just a second ago that was intriguing, which was that you have to have original information. 00;14;07;20 - 00;14;38;16 Unknown And sometimes if people wait too long, you might already be in an investigation. But what if you're in an investigation and somebody comes in and provides original information? That's a really, really helpful and maybe you were stuck or maybe it does advance the investigation. Is that something that can still qualify, even though you might already be looking at a company as a subject, if they're able to basically, like advance the ball with something that you didn't know it does that still helps or does that still qualify them for whistleblower status? 00;14;38;20 - 00;15;04;16 Unknown So absolutely, that is still helpful and very well may qualify them for whistleblower status. New information that advances an existing investigation can be just as in the times even more valuable than information that leads to the opening of the new investigation. So it sounds like and I'm sorry, I'm this is probably one of the most interesting things, like I'm totally geeking and nerding out here, but it sounds like they could start the process without an attorney. 00;15;04;20 - 00;15;25;25 Unknown And then later on, if things get, I guess, what our friends across the pond would say might be a sticky wicket. They could they could get an attorney like there's no rules against getting counsel during the process and making a face. I know I saw the me and I and I'm like, You got to tell me why. That's a terrible idea, I think because we have practices there. 00;15;25;26 - 00;15;43;06 Unknown There's things we're going to know from the jump that are going to be helpful to someone who wants to make one of these tips complaints or referrals. And I think having an attorney guide you in that process, both to preserve anonymity and also to sort of help make sure that it lands and is heard and all of those things. 00;15;43;09 - 00;16;18;17 Unknown I don't want to discourage anyone from coming forward if they don't have an attorney, but I do think there's real value to having one. From the jump. I will say, you know, I don't talk about my past life very often, but when I worked on the January six committee, we did have a tip line. And I will say you could tell people who had likely received assistance in preparing their tips just because of the way that they were written, the way that they were organized, like it made it so much easier for us to review them than sometimes it was like a stream of consciousness, like somebody writing a diary entry or, you know, there's 00;16;18;17 - 00;16;39;00 Unknown just certain things that I think help a reviewer who are reviewing tips. And I think lawyers can kind of help your sound credible look like, you know what you're talking about, clarify how it's original. I think people don't understand. People think to think that attorneys are good at litigation, I'm going to court or I only need an attorney for certain things. 00;16;39;00 - 00;16;56;13 Unknown But, Juliana, to your point, I really do agree. And I'm not just saying this because I'm a lawyer, but I really think people sometimes underestimate the value of the help that lawyers can provide from the beginning. And God forbid you don't know the process, you actually step in it. And I don't know what landmines there are in the whistleblower process, but I know in other areas that. 00;16;56;14 - 00;17;15;18 Unknown Well, let me ask, are there landmines that people can step on if they kind of go their own, try to do it themselves? Are there deadlines in this? Like what's what are the downsides of possibly doing it yourself? I think one of the sort of preliminary questions is figuring out where to file. And that's something that lawyers have experience in. 00;17;15;18 - 00;17;40;23 Unknown And there's multiple agencies that might be interested in the information that someone regarding crypto and fraud or other organization tax, etc. may be interested in. And so that's maybe a point just to talk briefly about the different agencies that if someone comes to us that we might reach out to so there's the CFTC ably represented here, the S.E.C., FinCEN and the IRS or Treasury writ large and the IRS. 00;17;40;23 - 00;17;58;02 Unknown And so there's some small differences in terms of the amount of the whistleblower award between agencies and the threshold amount to trigger the award. But because of the sort of situation we're in with the law, with jurisdiction there may be considerations about who to reach out to first, whether to file simultaneously with different agencies, how to sort of coordinate that. 00;17;58;09 - 00;18;16;05 Unknown And that's one of the areas that a lawyer can be really helpful. And some people even say, like we'll file with one agency, but then suggest they collaborate with another and there's sort of all of these pieces to it as well. Even from the filing point, they're sort of from that from that first decision that there's that's a process that a lawyer can really be helpful. 00;18;16;08 - 00;18;37;02 Unknown And so for people at home, i don't think we've talked about the s.e.c. So that's the securities exchange commission. And i'm assuming that there's some kind of a question there, especially for crypto, whether it's a security or whether it's a commodity, and that might impact who you would, who you would go to. Can you only file with one agency though, or can you file as a whistleblower with multiple agencies simultaneously? 00;18;37;03 - 00;19;01;02 Unknown Simultaneously. okay. Can you pit them against each other in kind of like a gladiator? Kind of as well. The CFTC is moving so much faster or. No, but but I think that's interesting because I just assumed you'd have to pick one track and people might not know, you could do multiple agencies, you might theoretically, could you recover from multiple agencies on those tracks? 00;19;01;04 - 00;19;17;09 Unknown You know, one tip is if you are filing a whistleblower complaint and you are filing with multiple agencies, flagged that in your complaint, or if you are represented by counsel, have your counsel flag that to us. But the other piece I was going to add, you know, we're talking about potential advantages of having attorneys on the front end. 00;19;17;16 - 00;19;38;21 Unknown I'm going to circle back to to this group and to other organizations. I mean, something that I do and many of my colleagues do is informally spitball with whistleblower counsel on an anonymous basis about a potential whistleblower complaint. So I will have people call me up and say, hey, you know, I've got this whistleblower that is got some information about, you know, high level industry general stuff. 00;19;38;24 - 00;19;58;08 Unknown Is this something that might be useful to you? And we might spend a couple of minutes talking about how that might relate to violations of our act or how it might be better targeted to another agency. And so counsel can also help you on the front end sort of sort through where to go. I remember having many of those hypothetical discussions when I was at DOJ. 00;19;58;08 - 00;20;20;13 Unknown The subheading of this podcast is Lawyers are good. So we're going, we all need to be tossed in. We see or whatever the Shakespeare quote, a lawyer, but there's some research showing that women are more likely to be whistleblowers. Women in tech are more likely to be whistleblowers, but also that women can face more retaliation for being whistleblowers. 00;20;20;13 - 00;20;39;15 Unknown And so that's another reason. I mean, that's why we. Let me start by so news are involved with association association for women in cryptocurrency because we want to make sure that women who are seeing misconduct are sort of safe and supported if they want to come forward. But that's another reason why having a lawyer can be helpful if there is potential blowback or retaliation. 00;20;39;22 - 00;20;57;22 Unknown Having a lawyer can afford protection in another sort of partner in that when I used to give talks are used to be a soccer team USA, and when I would speak to the BSA AML community at conferences, I think I told you guys there was a noticeable I mean, I would have said 90, 95% of those conferences were women. 00;20;57;24 - 00;21;36;20 Unknown There's a statistically significant number of women in compliance AML, BSA globally, from what I've seen, where it tends to be heavily female, and then the business side tends to be more heavily male. And I'm sure there are tons of articles and studies that could explain that. But whatever the reason or whatever why, we go into risk assessment, risk, determination, risk mitigation, there's definitely something to be said about it impacting on the on the whistleblower side, it just makes logical sense, as does the increased retaliation just to add, you know, there are anti retaliation protections in our act and in comparable legislation, but it is a it is a non-zero risk. 00;21;36;20 - 00;22;06;00 Unknown And I think, Juliana, you're you're wise to flag it. So earlier you were saying kind of you know, it's not just a given that you come forward that the government is going to get involved. There's an evaluation process. Can you tell us, like what goes into that? What do you consider when determining whether whether you and I know you can't speak for other agencies, so Juliana, you can talk about those, but what goes into like a CFTC determination of whether your agency wants to get involved and what's the timing of that, if you can say, Sure. 00;22;06;01 - 00;22;29;12 Unknown So all of our whistleblower complaints, our tickers are initially funneled through our whistleblower office, which is a freestanding and independently funded unit, and our division of enforcement, that unit will conduct the initial review. In particular, they'll conduct a privilege review. One of the things we don't want is a whistleblower that is providing information that is protected by the attorney client privilege without the appropriate waivers and caveats. 00;22;29;12 - 00;22;46;14 Unknown So they'll do the review to make sure there's no privileged material that an enforcement team shouldn't see, do a conflict review, and then pass that onto our triage unit, who will do the initial evaluation as to whether or not it is potentially viable if that complaint is deemed to be potentially viable, gets spun out and assigned to an enforcement team. 00;22;46;15 - 00;23;03;11 Unknown That process, it depends on the volume of the submission and it could take a couple of days, it could take a little longer. And then, you know, the enforcement team receives the whistleblower complaint is similar to how they act with with all leads that come in. Well, then kind of hit the ground running and start the process of looking into the conduct at issue. 00;23;03;14 - 00;23;22;03 Unknown But it could take a while, right, Because especially if it's complex, like is it ever that it takes weeks or months to like, look in before a whistleblower might hear anything back? Yes, that would not be uncommon at all. And, you know, recognizing if you're a whistleblower and you submit a complaint that may relate to an existing investigation that might lead to the opening of a new investigation. 00;23;22;03 - 00;23;43;15 Unknown But either way, the enforcement team that is running point on that matter is going to spend some time unpacking it and trying to understand the facts and conducting their own independent factual inquiry, which could involve anything from searching publicly available information to using our authorization under the act to request documents or subpoena documents or speaking with other individuals. 00;23;43;15 - 00;24;06;04 Unknown So there are a lot of things that could be happening behind the scene, and our investigations are all confidential. And I know that's the case for other agencies as well. So not hearing from an agency doesn't mean they are doing anything. It just means they could be doing a lot of things that you aren't privy to. I think one of the things that drives me crazy and I don't know if this also bothers you guys, but television and movies makes it seem like an agency is sitting around waiting for somebody to call. 00;24;06;04 - 00;24;28;17 Unknown And the minute a case comes in, they're getting a call back the next day or three days later, and they don't portray how many tons of cases, how over how overloaded, under-resourced and understaffed a lot of these agencies are. So the idea that you're just going to submit something and get a call back to three days later, I just wish we saw this at DOJ. 00;24;28;17 - 00;24;49;13 Unknown I wish people were given more realistic expectations. Nobody ever notices on Law and Order during that. Sometimes time the dates are like months or years apart, but they're going in and it looks like they're interviewing the next day. And I'm like, Read the dates, read this. But I do think it gives people a kind of a misunderstanding of how fast or slow the system works. 00;24;49;16 - 00;25;07;07 Unknown So that so that's really helpful. I think, you know, Julianne, is something that I'm curious about. Like we talked about, most people think there's just a money reward because we've kind of alluded to that. But I have gotten the impression, especially in dealing with whistleblowers in other contexts, that there's more rewards than just sort of coming for it. 00;25;07;07 - 00;25;32;10 Unknown And you deal a lot directly with whistleblowers who go through this process. What are the benefits, if you had to say to somebody like it's is it just the money or are there other benefits to coming forward? Like what have you found dealing with whistleblowers themselves? I think it's certainly not just the money. I think a lot of people come forward because something has made them uneasy and others there's sort of that there's their own internal conscience that motivates people to come forward. 00;25;32;10 - 00;25;56;25 Unknown And also we a lot of our crypto whistleblower clients are true believers in crypto. And we often explain to people, you know, we say like we're not into crypto, we're anti-fraud. And a lot of people who really are invested in the industry, they want it to be a place where industry can flourish and that means weeding out fraudulent, manipulative actors because it won't be sustainable otherwise. 00;25;56;25 - 00;26;20;18 Unknown And so they see whistleblowing as a way to sort of to make that happen and to take action against entities or individuals who are not promoting the long term, the longevity of the crypto industry. That's an incredibly nice way to say it. I was thinking as you were talking, I was thinking of the FTC's case and I can't say whether there were or were not whistleblowers involved in that case. 00;26;20;18 - 00;26;46;05 Unknown But let's just say hypothetically there were you look at something like that that had such a negative impact on the industry when it went nuclear. And I and I have to wonder if there were whistleblowers involved, if it had come forward sooner, it didn't have to take an industry down with it. Right. And so for people who are sitting there thinking, well, gosh, like I'm seeing these things, I think there's some and this is not just an FDA thing. 00;26;46;05 - 00;27;12;12 Unknown I think this is something to be said about with some expression, an ounce of prevention is worth a pound of cure. Right. And I think there's just something to be said that if you see something bad, the longer you wait, generally, the worse it's going to be. And so letting something get to a certain point just seems if what you care about is the industry and changing things, I know it's really hard, but it seems like letting things go on and on and on just actually makes things worse. 00;27;12;14 - 00;27;36;08 Unknown But that's kind of, I think, just a general rule in life. No, but I think that's absolutely right. And last year, about a third of the whistleblower complaints that we received related to crypto. So this is a significant portion of our whistleblower practice. And I often say that my favorite whistleblowers, if I'm allowed to have favorites, are those that are big supporters of the crypto ecosystem. 00;27;36;08 - 00;28;04;25 Unknown And, you know, at the same time, people who recognize that innovation doesn't excuse illegal behavior and so they are really invested and they are also, you know, the individuals that are most likely to continue to be invested and to be great resources for our enforcement teams as we move forward investigations. You know, it's funny you say that because I had the honor of privilege, both of speaking at a conference a couple of months ago when Ripple held swell in Dubai. 00;28;04;28 - 00;28;23;16 Unknown And one of the things that I talked about there was how what got us here won't get us there. And we are full on, I think, in that process right now where people keep saying this is a nascent industry. I'm like, no, 13 year old isn't nascent. In some countries, it's driving and having babies. We need to kind of mature and recognize the age, right? 00;28;23;16 - 00;28;46;03 Unknown And that means a transition to a more mature industry, a more mature voice, saying things that make more sense and recognizing responsible innovation needs to be a priority. And I imagine that there are many people who feel that way, who aren't seeing that in their companies and probably want to move that process along faster. I can totally empathize with that. 00;28;46;03 - 00;29;12;08 Unknown So it's funny, I to your point, I think you're allowed to have favorites and whistleblowers, but not children. It's my understanding. So totally okay for you to have favorite whistleblowers, but kids are supposed to be equal. But we all know I like right? My favorites, The dog. Everybody's on. My mom would say the same thing, but since my brother sometimes listens to these, he knows it's me now. 00;29;12;10 - 00;29;39;23 Unknown I, I just get it. But he's like the greatest brother in the world so I can make those jokes for them. So we talked about the positives. Julianne. It like we try to make this fair, balanced, nuanced. Let's talk about the negatives, because I'm sure there are some So what some things like if somebody comes in, I mean, understanding that it's factually contextual and specific to each person, but generally, are there some negative aspects that you kind of warn prospective clients about? 00;29;39;25 - 00;29;56;05 Unknown I know you mentioned solvency earlier, but it seems like there might be a couple more. I would say solvency is sort of one of the things we look at when we're trying to figure out what to pursue and how what we tell clients as we're contemplating going forward is sort of two main things. One is the anonymity is not guaranteed. 00;29;56;05 - 00;30;17;00 Unknown We will vigorously protect your anonymity if you want to be anonymous and we have one in ways I can't tell you because you don't know who the people are. But that means we want, you know, and in most cases folks do stay unknown. And agency is also work really hard to respect and preserve that. But there are circumstances in which your identity may become known. 00;30;17;04 - 00;30;35;10 Unknown Principally if a case goes to trial, you have a right to know who's accusing you. Witnesses get identified, and that may be a circumstance in which Shady becomes public. So that's something like we're very upfront about and we want people to consider and evaluate. And then the other thing that I always we work to stress is that the timeline can be long. 00;30;35;12 - 00;30;56;15 Unknown There's there's the assembling of the the to complete a referral which can take a while because we put a lot of time into those and then you submit and it's opaque on our side. You know it lists that it could be quick, it could not be quick. And then then there's the whole process. And if you if you get to a settlement, a recovery, there's then sort of the dividing up of the whistleblower award. 00;30;56;22 - 00;31;20;04 Unknown So for the SCC, the CFTC and since whistleblowers are entitled to between ten and 30% of the total amount recovered, but that percentage is divided amongst all whistleblowers who brought original information. And so that sort of allocation and the possible appeals, etc., that can also take a while, which is to say like we work to be upfront that this is years long. 00;31;20;07 - 00;31;43;28 Unknown All of those steps would identify potentially. And so really wanting folks to know that there's I don't know what you want to sort of add or elaborate there. Yeah, no, I think that's right. And particularly the back end award process I think is where whistleblowers are often a bit flummoxed at the amount of time involved. Right. Because you filed a complaint, the agency will do its investigation and and potentially litigation or maybe it's an administrative resolution. 00;31;43;28 - 00;32;05;14 Unknown But the kind of triggering event, if you will, for a potential whistleblower award is receiving final judgment. And people think, great, I see this press release. There is this big award in X case I'm going to get my money. And it's sort of a wait because what will happen is after final judgment is obtained, there will be what's called a notice of covert action that is published on s to the CFTC. 00;32;05;14 - 00;32;34;12 Unknown It's published on our website, and that notice is sent out in actions where we obtain over $1,000,000, either the CFTC or in our action, or in a related action, obtain over $1,000,000. So not all actions that are successful result in a notice being issued. But once that notice is issued, potential claimants have 90 days and then their claims are reviewed by our whistleblower office by the review staff, who will issue a preliminary determination that their claim is either granted or denied. 00;32;34;15 - 00;33;00;15 Unknown And then the whistleblower has an opportunity to object. They can request a meeting with the whistleblower office, they can appeal the denial, etc. and we have to go through that entire process for each matter before the award can be issued. And as to the CFTC, you know, it is our commission who issues the award. So ultimately, once we get through our process, the proposed final determination is submitted to the commission, who then decides the amount and issues of the award. 00;33;00;23 - 00;33;25;17 Unknown And so I'm assuming that there's some things that go into that. Like what if it's a group? Like what if you have multiple whistleblowers? Like how do they do? They just kind of divide it equally? Well, we've got three and they or do they say, Well, this guy was really helpful and this guy was really annoying and this guy just had an attitude the whole time, like what goes into the evaluation that I like to think likability gets rewarded because I wish there was more of that in the world. 00;33;25;20 - 00;33;52;26 Unknown But I don't know that we have pretty clear criteria for issuing the award. You know, the significance of the information provided the programmatic interest to the commission. I'm a big one, which often gets overlooked is the degree of assistance that the whistleblower or their counsel provides to our enforcement teams. And so those are all taken into account. And if there's a a matter where there are, you know, let's say three whistleblowers, it is not automatic that they will each get a third of the whistleblower award. 00;33;52;26 - 00;34;14;13 Unknown Rather, they will each be looked at individually and their contributions and information will be looked at individually. And then the determination will be made by our commission. That sounds actually pretty similar to like cooperation, like when I was a prosecutor and we would give like cooperation credit, like it was very fact based is very you could have four coconspirators, very different roles in cooperation, very different recommendations. 00;34;14;13 - 00;34;35;27 Unknown So I think I think it's better when it's fact based just because you want it to reflect what actually happened. I think it's more fair to people. I think it also incentivizes people to be on their best behavior and not their worst behavior. But, Julianne, it looked like you were going to add something. Only this is another area where it's helpful to have a lawyer because we you know, throughout the process, we have an eye towards this eventuality. 00;34;35;27 - 00;34;57;18 Unknown And so where we are like, you know, keeping track so that we can at the end sort of remind everyone about how useful our client lives and like concrete fact based for that utility. Yeah. And then we'll say, like we've been focusing a lot on the obviously because Liz is here, we've been focusing a lot kind of like on the CFTC and Giuliani. 00;34;57;18 - 00;35;26;13 Unknown You've mentioned the S.E.C. and IRS and some other programs. I want to take one quick second because as a former DOJ, BSA, AML person, I want to kind of talk about the enhancements in the AML Act of 2020, because I think most people don't know. In fact, a lot of plaintiffs whistleblower counsel, not you, not Darren, but others that I talked to, really didn't know that there was in fact a BSA whistleblower provision. 00;35;26;15 - 00;35;50;06 Unknown So we've had some very high profile AML failures in crypto recently. And I think that that's something worth talking about, that there is a provision and it's not just for crypto exchanges, I think, but can you just briefly talk about the kind of enhancements in the beefing up of the whistleblower provisions for BSA, AML violations at financial institutions? 00;35;50;08 - 00;36;15;13 Unknown Sure. So BSA is Bank Secrecy Act for those at home. And I said be careful of acronyms and I'm the worst violators. I deserve that. Fair. Fair, perhaps. And AML is anti-money laundering in the wake of the AML Act 2020 and subsequent improvements to the law, the Treasury Department now has a whistleblower program that pays 10 to 30% for tips that lead to monetary sanctions over $1 million. 00;36;15;18 - 00;36;41;24 Unknown Again, that 10 to 30% is divided, as we just talked about. And this includes violations both of the Bank Secrecy Act and of Treasury sanctions. We have submitted several under this program both related to crypto and to other areas. You write that it's not only crypto and the program is still truly decent, it's very new and it's exciting and it will have something promulgated, etc. There's not an online portal to submit yet, but it's really exciting. 00;36;41;24 - 00;37;05;03 Unknown And one advantage to this program is that to submit it to the to this office, to the whistleblower office are forwarded to FinCEN to open the Office of Foreign Assets Control and the Department of Justice's National Security Division and the Money Laundering and Asset Recovery section. So you sort of are there's this automatic sort of dissemination that happens, especially if you're thinking about like money laundering or sanctions. 00;37;05;03 - 00;37;27;07 Unknown You could see why anyone would want to be involved. And so that that sort of helps it get to the right place. And we're enjoying, you know, we're looking forward to working more with those programs. Yeah, I personally I'm very excited about that because it was disturbing the number of kind of BSA AML folks who would come up to me at these conferences when I was a prosecutor and say, Listen, I'm pretty sure my financial institution is doing something it shouldn't. 00;37;27;07 - 00;37;49;26 Unknown Like, where should I go? What should I do? And we the government did not have a good answer under the old statute. It was just it was just like, no established program. And sadly, like I heard from several of them, that essentially the result was you saw these locus, these like AML locus who would just go financial institution or financial institution if they couldn't fix said they would just leave, which was super sad and not the way that it's supposed to go. 00;37;49;26 - 00;38;15;08 Unknown So if you're a BSA AML person out there listening to this and you're stymied and you don't know where to turn now, you know there's a process called the Juliana's of the world, because there is something that we can do to kind of fix this. And I mean, I don't know if you guys agree with this, but I'm a firm believer that without enforcement actions, it's just very difficult to get companies and financial institutions to just do the right thing because they should. 00;38;15;11 - 00;38;49;10 Unknown I just see this cost benefit analysis, unfortunately, all the time, where even some of them who say, well, if we get hit by a civil enforcement penalty, we'll likely make way more than that. So costs of doing business kind of thing like it's it's a gamble some of them are willing to take. So I think and along those lines it's a it's a it's a good lead into so so what effect do you think that these cases I think earlier Liz, you mentioned I think binance's a few others like Mango Markets, Voyager and Celsius, like what's what effect do you think those cases have on encouraging whistleblowers to come forward? 00;38;49;12 - 00;39;09;13 Unknown Sure. So I obviously can't speak to any specific case, but in general, I think the CFTC's actions in the crypto space have done two things. I mean, first and foremost, they've raised the profile of our agency in the digital asset world. And then secondly, they've also provided some really important guidance to the industry as to corporate governance and compliance controls. 00;39;09;15 - 00;39;31;15 Unknown And on that first point, I sort of jokingly referred the CFTC as the little agency that could and I do that for a lot of reasons, but one of them is, you know, our agency has been throughout my tenure, they're kind of underfunded and working incredibly hard. I mean, if you look at the past decade or so, the financial markets, you've seen more and more market volume and money moving into our space, right? 00;39;31;16 - 00;39;54;29 Unknown With swaps and derivatives and now crypto. And so our volume of work has gone up significantly. And I don't know I know that a lot of people realize this, but the CFTC has around 700 full time employees. The SEC has around, I think 5000. They have eight or ten times their budget. So the expression that we use in martial arts is you are punching way above your weight, but you're punching way above your weight. 00;39;55;02 - 00;40;16;19 Unknown Absolutely. We will continue to. But given how resource strapped we are and how committed we all are to the mission, my agency is, is well aware of the value of a good whistleblower. And so the more we have these actions out there and the more people in the crypto space see them, I think the more that will bring people who have legitimate concerns about what's happening in this industry to our whistleblower program. 00;40;16;23 - 00;40;42;13 Unknown I think it's the greatest note that we could possibly end on, other than Julianne as market manipulation story do check ins, but we never really talked about market manipulation. So we'll have to leave that teaser out there that if you want to hear the greatest explanation of market manipulation involving chickens, you'll have to come to an association and women in crypto event and meet Julianna and your mind will be blown and leave it there. 00;40;42;15 - 00;41;03;20 Unknown That that's a great teaser and a reason, a reason to come along, I guess I'll say like last thoughts. Anything that you would say out there to anyone who maybe is considering this on the fence about this, worried about something that they're seeing at their company or has no idea what market manipulation is and wouldn't know how to identify it? 00;41;03;22 - 00;41;25;13 Unknown Julianna will go with you. Right. Like, what's one thing that you would leave people with? I think I remind people and often women that like if there's something that feels wrong or that feels unfair, pay attention to that. And I think that that's sort of what motivates a lot of the clients who end up with us often. And in this industry in crypto, there can be you know, there can be a sort of group group effect happening. 00;41;25;13 - 00;41;43;17 Unknown And so it really do pay attention to what you know, is is is it right is smoke and mirrors isn't there, etc.. You know, I love that because I'm sure you guys have seen we are militant online, both in the members only group on the public page. We're very big proponents of see something, say something. Do you see gender exclusion? 00;41;43;17 - 00;42;00;10 Unknown You see something's not right and I just love that goes with the tone of the only way we create a tipping point of any of this is to talk about it and bring it out into the light and sunshine kind of being the best disinfectant for these things. So I could not agree with that more. I it's just such a fantastic point, Liz. 00;42;00;10 - 00;42;24;03 Unknown It's a tough one to follow, but last is a takeaway for anyone out there. So I would say check out the CFTC is website whistleblower dot gov. Keep an eye on our whistleblower alerts. Expect there'll be a digital asset update coming soon. And I would also say let's just all do what we can to make sure that this industry is more compliant and stronger by the time Bitcoin is old enough to buy a drink instead of a pizza. 00;42;24;06 - 00;42;49;26 Unknown Okay, sorry, Julian. And that was probably the best news. And that's good. And I'm not even going to try to top it. So I just want to say thank you. Julian. It was this was a phenomenal conversation. I learned a ton. I know anyone listening will learn a ton. I also want to say a huge thank you to our sponsor, Bracewell LLP, to the incredible Emily Borowski for her invaluable tech support, Stephen Sargeant and airdrop for their assistance with post production. 00;42;49;26 - 00;43;16;21 Unknown And to all of you who listen positive or negative, we really welcome your feedback. We hope you'll rate us online and send us suggestions for future episodes. If there's things and topics that you want to learn about, let us know if you have comments, questions or thoughts for future podcasts. And for anyone who's interested in learning more about the association, our global events, or the advocacy initiatives we're working on in 2024 to increase inclusion, please check out our public LinkedIn page, our Twitter or Instagram pages. 00;43;16;21 - 00;43;36;00 Unknown Add a global or our web page at WW w dot women in crypto dot org, which is also where you can sign up and join and meet incredible women like the women that you heard from today, and male members who are also some of our greatest allies who we welcome and encouraged to join as well. Thanks again for tuning in. 00;43;36;00 - 00;43;45;16 Unknown We hope you have a wonderful holiday season and a happy New Year and we hope to see you next time.