The U.S. Commodity Futures Trading Commission (CFTC) has eliminated a settlement policy that had been in place since 1998. Under the old policy, the CFTC would generally not accept a settlement if the defendant publicly denied the allegations in the indictment or executive order after reaching a settlement. This change means that in the future, those investigated will have greater freedom of public comment after reaching a settlement with regulatory agencies.
The CFTC stated that the old policy might have created the impression that regulators were trying to evade external criticism through settlement clauses. CFTC Chairman Michael Selig said the commission had been implementing this practice for nearly 30 years, and the current shift aligns it more closely with other U.S. regulatory agencies.
The SEC had already made adjustments in May.
This change is not an isolated incident. The U.S. Securities and Exchange Commission (SEC) eliminated a similar rule in May. The SEC's previous policy, dating back to 1972, primarily restricted those subject to enforcement from publicly denying regulatory allegations after a settlement.
SEC Chairman Paul Atkins previously stated that removing such restrictions would effectively end constraints on external criticism of regulatory agencies. SEC Commissioner Hester Peirce also believes that allowing both sides in law enforcement to publicly express their positions would help create a clearer enforcement record.
The Gemini case provides new context.
This policy shift comes as U.S. market regulators are re-examining some of their crypto enforcement practices. For a long time, many crypto companies have criticized "no-deny" clauses, arguing that even if they disagree with regulators, they are often required to remain silent under settlement conditions.
The Gemini case has become a recent focus of discussion. In January 2025, the exchange agreed to pay $5 million to settle a charge with the CFTC regarding misleading statements related to its Bitcoin futures products. At the time, Gemini settled on a condition of neither admitting nor denying the allegations.
However, the CFTC has since asked a federal judge to overturn the original order against Gemini. Reuters previously reported that Gemini agreed not to seek a refund of the $5 million fine, while the CFTC now says the false statement case should never have been brought.
The old settlement terms are no longer valid.
The CFTC also stated that it will no longer enforce the "non-denial" clauses in existing settlement agreements. This means that those who have already signed settlement agreements may be given greater leeway in making public statements.
However, the CFTC also emphasized that the new approach does not eliminate its discretion in future enforcement cases. If the facts of the case or public records require, the regulatory agency can still require parties to admit certain facts or legal liabilities during settlement negotiations.
In terms of practical impact, this adjustment will not withdraw existing investigations, nor will it rewrite the framework of U.S. commodity law, but it will change the wording of future enforcement settlement documents. For crypto companies, the restrictions on public speaking when negotiating settlements with the CFTC are expected to be significantly reduced in the future.
