DIGITAL FINANCIAL ASSETS AND INVESTOR PROTECTION IN THE USA
Abstract
The article examines the organizational structure of the investor protection system within the digital financial assets market in the United States. The regulatory framework involves key entities such as state regulators (SEC and CFTC), a self-regulatory organization (FINRA), a non-profit Securities Investor Protection Corporation (SIPC), and a division in the Ministry of Finance (FinCEN). A specific focus is placed on investigating the operational experiences of the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission in detecting offences within the digital financial assets market. The article highlights critical aspects of the Offices of the Whistleblower work, established as integral units within the relevant regulatory bodies, emphasising their role in engaging individuals to enhance consumer protection in financial services. The study delves into the underlying principles that contribute to the efficacy of Whistleblower Programs within two regulators in the US market, namely, whistleblower protection guarantee; the ability to report violations of legislation anonymously; the presence of a monetary reward, the size of which depends on the size of the imposed sanctions. The article identifies the potential division of responsibilities between the SEC and CFTC concerning the regulation of digital financial assets. It presents quantitative indicators validating the success of Whistleblower Programs in these regulators, with a specific focus on detecting offences within the crypto-assets market. Moreover, the authors analyze notable cases initiated by the CFTC in 2023 related to legal violations in the digital financial assets market. The article draws conclusions regarding the feasibility of implementing similar crime detection programs in the Ukrainian digital financial assets market, emphasizing their potential to elevate the protection level for domestic investors.
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