CFTC Scraps ‘No-Deny’ Settlement Policy in Move Welcomed by Crypto Industry

The US Commodity Futures Trading Commission has scrapped a long-standing policy that barred defendants from settling cases if they publicly denied the agency’s allegations.

Cointelegraph reported on June 4 that the CFTC would withdraw the so-called “No-Deny” policy introduced in 1998.

The policy required defendants entering settlements with the regulator to agree not to publicly deny the CFTC’s allegations.

CFTC Commissioner Mike Selig said the agency had for decades permitted settlements only if defendants pledged not to publicly dispute the commission’s claims. He added that the policy was being eliminated to bring the CFTC in line with other regulators across the US 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 the US Securities and Exchange Commission’s repeal of a similar 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 reaching a settlement with regulators, they were unable to publicly contest the case.

The CFTC said the change should give it more flexibility in future enforcement settlements. It added that while it would not newly enforce clauses contained in existing settlements, 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 reviewing a series of regulatory actions against crypto companies that were brought during Joe Biden’s administration. The CFTC recently also sought to cancel its $5 million settlement with crypto exchange Gemini.