CFTC Drops ‘No-Deny’ Settlement Rule
The CFTC rescinded its 1998 ‘no-deny’ policy, allowing settlements when defendants publicly deny agency allegations and aligning its practice with a similar SEC change.
The U.S. Commodity Futures Trading Commission on Wednesday rescinded a 1998 policy that barred settlements when defendants publicly denied the agency’s allegations. The change removes a long-standing restriction and gives the commission greater flexibility in negotiating enforcement agreements.
CFTC Chairman Mike Selig said the rule “may have created an incorrect impression that the Commission is trying to shield itself from criticism.” He noted the rescission brings the agency in line with other federal regulators and will provide more options when resolving cases. The commission also said it will not seek to enforce existing no-deny clauses in prior settlements.
Under the previous policy, the commission would not settle unless defendants agreed not to publicly deny the agency’s allegations. The CFTC said the new approach does not prevent it from requiring parties to acknowledge specific facts or liabilities in settlements when the agency determines such admissions are necessary to protect markets or investors.
Crypto firms and industry advocates have criticized no-deny provisions, arguing they limit free speech and prevent companies from publicly clearing their names after a settlement. Enforcement actions affecting digital-asset firms have been a focus of regulatory attention and industry pushback in recent years.
The policy change follows a similar action by the Securities and Exchange Commission in May, when that agency removed its own no-deny settlement practice. Regulators have said allowing settlements without forced denials will better align enforcement practice with defendants’ First Amendment concerns and permit more case-by-case negotiating flexibility.
The decision comes amid other agency moves involving crypto enforcement. Last week the CFTC asked a court to vacate a $5 million settlement with the crypto exchange Gemini; Selig characterized the case as “politically targeted.” Tim Massad, who led the CFTC during the Obama administration, described the agency’s effort to reverse that settlement as “extraordinarily unusual.”
The CFTC did not set a timetable for how often it will accept settlements that include denials. Agency officials said the priority is to assess settlement terms on a case-by-case basis rather than apply a blanket rule.
The material on GNcrypto is intended solely for informational use and must not be regarded as financial advice. We make every effort to keep the content accurate and current, but we cannot warrant its precision, completeness, or reliability. GNcrypto does not take responsibility for any mistakes, omissions, or financial losses resulting from reliance on this information. Any actions you take based on this content are done at your own risk. Always conduct independent research and seek guidance from a qualified specialist. For further details, please review our Terms, Privacy Policy and Disclaimers.
Articles by this author
