What Is the Role of a Whistleblower in Uncovering Front-Running within a CEX?

Whistleblowers, often current or former employees, play a critical role by providing regulators with internal, non-public information and evidence (e.g. emails, internal documents, logs) that is necessary to prove a front-running scheme. Regulators like the SEC and CFTC offer substantial financial rewards and legal protections to incentivize individuals to report such violations, which are otherwise very difficult to detect from external market data alone.