The Commodity Futures Trading Commision (CFTC) is seeking to increase enforcement in the carbon market and is turning towards its highly successful whistleblower program to aid in the effort. In June 2023, the agency both announced the creation of a new Environmental Fraud Task Force and posted a whistleblower alert calling on individuals to report fraud and manipulation in carbon markets.
Voluntary carbon markets involve the purchase and sale of carbon credits, also known as carbon offsets. These markets, part of a market-based shift towards a low-carbon economy, have high potential for fraud and manipulation according to the CFTC.
“Alongside the continued growth of CFTC regulated carbon offset derivatives contracts, the agency is building upon its expertise to ensure the utility and reliability of these markets, as well as its ability to identify and pursue any potential fraud or abusive practices,” said CFTC Chairman Rostin Behnam. “Information from whistleblowers advances the Commission’s enforcement mission and, in turn, further builds integrity and trust in the carbon markets by rooting out fraud and manipulation.”
The CFTC Whistleblower Program was created in 2010 alongside the SEC Whistleblower Program with the passage of the Dodd-Frank Act. Through the program, qualified whistleblowers, individuals who voluntarily report original information that leads to a successful enforcement action, are entitled to monetary awards of 10-30% of the funds collected by the...
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