The US Commodity Futures Trading Commission is officially changing how it handles legal disputes. Following closely in the footsteps of the Securities and Exchange Commission, the CFTC has rescinded its controversial “no-deny” policy. This long-standing rule previously prevented the agency from accepting a lawsuit settlement if the defending party publicly denied the government’s allegations.
With this major regulatory shift, defendants now have more freedom to speak their minds after settling out of court. The move signals a broader alignment across federal regulators and marks a significant victory for industries—particularly the cryptocurrency sector—that have frequently clashed with federal agencies over free speech and enforcement tactics.
Why the CFTC Ended Its Decades-Old Settlement Rule
First adopted in 1998, the “no-deny” policy effectively acted as a gag order. For nearly three decades, defendants who wanted to settle a case with the CFTC had to promise they would never publicly contradict the commission’s official allegations. However, regulators recently decided that the rule was sending the wrong message to the public. According to the CFTC, maintaining the policy created the incorrect impression that the commission was actively trying to shield itself from outside criticism.
CFTC Chairman Mike Selig praised the decision to scrap the rule, noting that it brings the agency’s practices in line with other government watchdogs, including the SEC, which dropped its own version of the policy in May. Moving forward, the agency will not enforce any existing no-deny provisions. While this change grants the CFTC much more flexibility in how it negotiates and finalizes enforcement actions, it doesn’t mean companies are entirely off the hook. The commission can still choose to require specific defendants to admit to certain facts or liabilities as a condition of settling their cases.
A Shifting Landscape for Crypto Enforcement
This policy reversal is generating massive waves in the digital asset space. For years, crypto companies facing aggressive enforcement actions from both the SEC and the CFTC have heavily criticized the no-deny rule, arguing that it unfairly restricted their First Amendment rights. By forcing them into silence, businesses felt they couldn’t defend their reputations or explain the nuances of their technologies to the public.
The rescission of the rule also highlights a dramatic pivot in how the government handles financial oversight. Under the current Trump administration, both the SEC and CFTC have actively begun rolling back various enforcement actions that were originally launched against crypto firms during the Biden administration. This shifting political tide was put on full display when the CFTC recently moved to vacate a $5 million settlement with the cryptocurrency exchange Gemini. Chairman Selig openly described the initial Gemini case as politically targeted. However, not everyone agrees with this new direction; former CFTC head Tim Massad, who led the agency under the Obama administration, publicly criticized the choice to reverse the Gemini settlement, calling the move extraordinarily unusual.
