The U.S. Commodity Futures Trading Commission (CFTC) has officially scrapped its long-standing “no-deny” settlement policy, marking another significant change in how federal regulators approach enforcement actions involving financial and digital asset markets.

The move follows a similar decision by the Securities and Exchange Commission (SEC) and signals a broader shift toward greater transparency and flexibility in regulatory settlements—particularly as U.S. agencies reassess their approach to cryptocurrency enforcement.

A 27-Year-Old Policy Comes to an End

The policy, originally introduced in 1998, prevented the CFTC from accepting settlement agreements if defendants publicly denied the allegations outlined in enforcement complaints or administrative actions.

Under the rule, companies and individuals could settle cases without formally admitting wrongdoing, but they were also restricted from publicly disputing the agency’s claims.

Critics argued that the policy effectively forced defendants into silence, even when they disagreed with certain allegations or believed the enforcement action was unjustified.

CFTC Chairman Michael Selig said the agency’s decision aligns its practices with broader government standards and removes a framework that some viewed as limiting open discussion around regulatory actions.

According to Selig, the policy had been in place for nearly three decades and was increasingly seen as creating the perception that regulators were attempting to shield themselves from criticism.

Following the SEC’s Lead

The CFTC’s decision comes shortly after the SEC eliminated its own version of the “no-deny” policy.

The SEC’s rule had existed since 1972 and similarly restricted defendants from publicly challenging allegations after reaching settlement agreements with the agency.

SEC Chairman Paul Atkins previously argued that removing the restriction promotes transparency and allows market participants to openly discuss regulatory disputes. Commissioner Hester Peirce also supported the change, stating that public debate can contribute to a clearer understanding of enforcement decisions and regulatory interpretations.

Together, the two moves represent one of the most notable shifts in enforcement philosophy seen in Washington’s crypto regulatory landscape in recent years.

Why Crypto Companies Are Paying Attention

For many digital asset firms, the change addresses a long-standing concern.

Crypto companies have frequently argued that settlement agreements often forced them into accepting reputational damage without giving them the ability to publicly defend themselves or challenge aspects of a regulator’s narrative.

Under the revised framework, companies may now have greater flexibility to settle disputes while continuing to express disagreement with certain allegations or interpretations of the law.

The policy does not prevent regulators from pursuing enforcement actions, imposing penalties, or seeking admissions of wrongdoing when deemed necessary. However, it removes one of the most controversial conditions attached to many settlement agreements.

Gemini Case Brings New Attention to the Debate

The timing of the CFTC’s decision is particularly notable because it follows renewed scrutiny of the agency’s enforcement case against crypto exchange Gemini.

In January 2025, Gemini agreed to pay a $5 million penalty to settle allegations that it made misleading statements connected to a Bitcoin futures product.

As is common in regulatory settlements, Gemini resolved the case without admitting or denying the allegations.

However, the situation has since taken an unexpected turn.

The CFTC recently asked a federal court to vacate the earlier order against Gemini, with reports indicating that the agency now believes the false-statement case should not have been pursued.

While Gemini reportedly agreed not to seek reimbursement of the $5 million settlement amount, the case has become a focal point in discussions about regulatory accountability and enforcement discretion.

Chairman Selig has reportedly described the Gemini matter as politically motivated, further fueling debate about how digital asset cases have been handled in recent years.

Existing Settlements Will Not Be Enforced Under the Old Rule

The CFTC also confirmed that it will no longer enforce “no-deny” provisions contained in previous settlement agreements.

This means companies and individuals who previously settled with the agency may now be able to publicly challenge or discuss aspects of those cases without fear of violating settlement terms.

The change represents a significant departure from prior practice and could lead to renewed discussion around several high-profile crypto enforcement actions from past years.

What Changes for the Crypto Industry?

While the decision does not alter existing commodity laws or erase prior investigations, it changes the way future settlements are structured.

Key implications include:

• Greater freedom for defendants to publicly challenge regulatory allegations.
• Increased transparency surrounding enforcement actions.
• More flexibility during settlement negotiations.
• Potentially fewer incentives for firms to avoid public disputes.
• A broader shift toward accountability on both sides of regulatory proceedings.

For crypto companies navigating an evolving regulatory landscape, the policy change may provide additional room to defend their positions while still resolving legal disputes through negotiated settlements.

A Broader Regulatory Reset

The CFTC’s move is increasingly being viewed as part of a wider regulatory recalibration taking place across Washington.

As lawmakers debate market structure legislation and agencies revisit previous enforcement strategies, regulators appear to be moving away from policies that critics say discouraged open dialogue and transparency.

Whether this ultimately leads to a more balanced relationship between regulators and the crypto industry remains to be seen, but the removal of the “no-deny” rule marks another clear sign that U.S. digital asset oversight is entering a new phase.