CFTC Ends ‘No-Deny’ Settlement Policy in Move Welcomed by Crypto Industry
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The US Commodity Futures Trading Commission has scrapped a policy that barred settlements with defendants who publicly denied the agency’s allegations.
Cointelegraph reported on June 4 that the CFTC will withdraw the so-called No-Deny policy, which was introduced in 1998.
The policy required defendants settling with the regulator to agree not to publicly deny the CFTC’s allegations.
CFTC Commissioner Mike Selig said the agency had for decades allowed case settlements only if defendants agreed not to publicly deny the commission’s claims. He added that the policy was being eliminated to bring the CFTC in line with other regulators across the government.
The CFTC said it concluded the policy could create the mistaken impression that the commission was trying to shield itself from criticism.
The decision follows a similar move by the US Securities and Exchange Commission, which scrapped its own policy in May.
Crypto companies targeted by CFTC and SEC enforcement actions had criticized the policy as a restriction on free speech. They argued that even after settling with regulators, they were unable to publicly challenge the case.
The CFTC said the policy change should give it more flexibility in negotiating future enforcement settlements. It added that it will not newly enforce clauses in existing settlements, though it may still require defendants in some cases to admit facts or legal liability.
Since Donald Trump took office, the CFTC and SEC have been reexamining regulatory actions brought against crypto firms during Joe Biden’s administration. More recently, the CFTC moved to cancel a $5 million settlement it had reached with crypto exchange Gemini.
