US Commodity Futures Trading Commission Abolishes No-Deny Policy in Settlement Agreements

The US Commodity Futures Trading Commission (CFTC) has made a significant change to its enforcement policies by abolishing the long-standing 'no deny' clause in settlement agreements. This policy, which was introduced in 1998, prohibited defendants from publicly denying agency allegations as a condition of resolution.

The CFTC's decision aligns with a similar move made earlier this year by the Securities and Exchange Commission (SEC), which rescinded a related no-deny provision in May. The change is seen as a shift towards greater flexibility in enforcement settlements, allowing defendants to more freely dispute agency allegations without fear of penalty.

The CFTC's Chair, Mike Selig, framed the change as restoring parity with other regulators and reducing the risk of misperception about the Commission's accountability. He noted that the no-deny clause had been in place for nearly three decades and that the Commission is now moving towards a more balanced approach to enforcement.

The policy change may have significant implications for how crypto-enforcement matters are settled, particularly given the recent efforts by the CFTC to vacate its $5 million settlement with Gemini. The decision highlights the ongoing scrutiny surrounding how US regulators handle crypto enforcement and the potential implications for settlement architecture and public accountability.