TL;DR
- Policy reversal: The CFTC ended its 1998 no‑deny policy, saying it created the wrong impression and limited defendants’ ability to dispute allegations.
- Regulatory alignment: The regulator matched the SEC’s recent move, arguing the change increases flexibility in settlements while still allowing the agency to require certain admissions.
- Gemini case shift: The agency asked a court to vacate its $5 million Gemini settlement, a step former Chairman Tim Massad called “extraordinarily unusual.”
The CFTC has formally rescinded its long‑standing “no‑deny” policy, a shift that aligns the agency with the SEC and marks a significant change in how federal regulators approach settlements. The policy, in place since 1998, barred defendants from publicly denying the CFTC’s allegations as a condition of resolving enforcement actions. The agency said the rule risked creating the impression that it sought to insulate itself from criticism.
CFTC Aligns With SEC After Nearly Three Decades of Restrictions
According to the regulator, the decision mirrors the SEC’s move in May to eliminate its own version of the rule. CFTC Chairman Mike Selig said the agency’s approach had required defendants to remain silent even when they disagreed with the allegations. He noted that the reversal brings the regulator in line with other regulators and removes a barrier that critics, including crypto firms, argued limited their free‑speech rights.
Cryptocurrency companies that have faced enforcement actions from the CFTC or SEC have long pushed back against the no‑deny framework. They argued that the policy forced them into settlements that prevented them from publicly defending themselves, even when they believed the agencies’ claims were overstated or unfounded.
CFTC Says Policy Change Expands Flexibility but Keeps Some Requirements
The regulator said the shift gives it more flexibility when negotiating settlements, though it may still require certain admissions in specific cases. The agency also clarified that it will not enforce existing no‑deny provisions already embedded in past agreements. The change comes as the CFTC and SEC continue to unwind several enforcement actions initiated during the Biden administration. Under the Trump administration, both agencies have moved to roll back or revisit cases involving crypto companies.
CFTC Moves to Vacate Gemini Settlement, Drawing Unusual Attention
On Thursday, the regulator asked a federal court to vacate its $5 million settlement with crypto exchange Gemini. Selig described the original case as “politically targeted,” signaling a broader reassessment of past enforcement decisions. Tim Massad, who led the CFTC during the Obama administration, said that reversing a finalized settlement is “extraordinarily unusual,” underscoring the significance of the agency’s shift.
