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CFTC ends 30-year 'no-deny' policy for enforcement settlements

Created at 4 Jun · 12:08 AM3 sources↑ Market-relevant3 events
IN SHORT

The CFTC has repealed its 30-year-old 'no-deny' policy, allowing defendants to settle cases without admitting guilt. This move aligns the agency with the SEC and provides greater flexibility in enforcement actions.

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Key Numbers

30-year-oldduration of policy
1998year policy was adopted
$5 millionGemini settlement amount

Who's Involved

CFTC
US Commodity Futures Trading Commission, rescinding 'no-deny' policy
Mike Selig
CFTC Chairman, announcing the repeal and greater flexibility
SEC
US Securities and Exchange Commission, which rescinded a similar policy in May
Gemini
Crypto exchange whose $5 million settlement the CFTC is seeking to vacate
Tim Massad
Former CFTC chairman commenting on the Gemini settlement reversal
CFTC ends 30-year 'no-deny' policy for enforcement settlements

↳ Why This Matters

The CFTC's decision to end its 'no-deny' policy provides greater flexibility in resolving enforcement cases and addresses concerns about free speech limitations previously raised by crypto firms. The move to vacate the Gemini settlement also signals a potential shift in how the agency handles certain past enforcement actions.

Key facts

  • CFTC ends its 'no-deny' policy for enforcement settlements.
  • The policy, in place since 1998, prevented settlements if defendants denied allegations.
  • CFTC Chairman Mike Selig stated the repeal provides greater flexibility.
  • The agency cited the policy may have created an impression of shielding itself from criticism.
  • The SEC rescinded a similar policy in May.
  • CFTC also moved to vacate a $5 million settlement with Gemini.

The Commodity Futures Trading Commission (CFTC) has repealed its long-standing 'no-deny' settlement policy, which had been in effect since 1998. This policy prevented the agency from accepting settlements in enforcement actions if the defendant denied the allegations. CFTC Chairman Mike Selig announced the repeal, stating that it provides the commission with greater flexibility in resolving enforcement actions and aligns its practices with other federal regulators, including the Securities and Exchange Commission (SEC), which rescinded a similar policy in May. The CFTC indicated that the previous rule may have created the impression that it was attempting to shield itself from criticism. The agency also confirmed it will not newly enforce no-deny clauses in existing settlement agreements. In a related development, the CFTC sought to vacate a $5 million settlement with crypto exchange Gemini, with Chairman Selig describing the case as 'politically targeted'.

Frequently asked questions

It was a policy that prevented the CFTC from accepting a settlement if the defendant denied the agency's allegations.

The policy had been in place for approximately 30 years, since 1998.

The CFTC stated the policy may have created the impression that it was trying to shield itself from criticism and to gain more flexibility in settlements.

Yes, the US Securities and Exchange Commission (SEC) rescinded a similar policy in May.

It represents a departure from the agency's prior position and signals a review of certain past enforcement cases, particularly those involving crypto firms.

What Happens Next

01CFTC has not announced a new timeline for the resolution of the Gemini case.

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Cadence

How It Developed

4 Jun · 8:59 AM
The CFTC will not enforce no-deny clauses in existing settlement agreements and vacated a $5 million settlement with Gemini.
CoinCentral via PiQSuite
4 Jun · 3:28 AM
CFTC rescinds its 30-year-old 'no-deny' settlement policy, citing flexibility and avoiding the impression of shielding itself from criticism.
CoinTelegraph via PiQSuite
3 Jun · 11:00 PM
The CFTC is ending a nearly 30-year-old policy that prevented parties from discussing or denying wrongdoing after settling enforcement cases.
Bloomberg | Markets via PiQSuite

Sources

T1
CFTC Ends Decades-Old 'Gag Rule' in Enforcement Settlementsm.piqsuite.com
T1
CFTC follows SEC in scrapping 'no-deny' policy for settlementsm.piqsuite.com
T1
CFTC Aligns With SEC by Repealing No-Deny Policym.piqsuite.com

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