The U.S. Commodity Futures Trading Commission has officially terminated its decades-old policy that prevented defendants from publicly disputing allegations after settling enforcement actions. This change, announced recently, marks a significant pivot in how the agency handles crypto-related cases.
Established in 1998, the former rule effectively silenced firms that agreed to settlements, barring them from denying the charges even if they maintained innocence. The CFTC acknowledged that this approach might have been perceived as an attempt to avoid external scrutiny. Chairman Michael Selig emphasized that the agency is now aligning with broader government regulatory practices.
This move mirrors a similar reversal by the Securities and Exchange Commission, which scrapped its own no-deny provision in May after nearly five decades. SEC Chair Paul Atkins noted that the change allows settling parties to speak freely, fostering a more transparent enforcement record. Commissioner Hester Peirce also supported the shift, arguing that open dialogue strengthens regulatory clarity.
The timing of the CFTC’s decision is particularly relevant as regulators reassess their oversight of digital assets. Crypto firms have long complained that no-deny clauses forced them into silence despite disagreements with agency allegations. The new policy offers more flexibility, though the CFTC retains the authority to require admissions of fact or liability when warranted.
Notably, the policy change comes amid ongoing scrutiny of high-profile cases. For instance, Gemini recently settled with the CFTC for $5 million over claims related to a Bitcoin futures product. The exchange neither admitted nor denied the accusations at the time. However, the CFTC has since moved to vacate the prior order against Gemini, with Chairman Selig calling the case politically motivated. Gemini has agreed not to seek a refund of the penalty.
While the no-deny rule is eliminated, the agency will not enforce existing no-deny provisions in past settlements. For crypto companies, this development primarily alters the language of future settlement agreements rather than dismissing pending investigations or modifying existing laws. It provides defendants greater freedom to contest allegations publicly without forfeiting settlement benefits.