CFTC follows SEC in scrapping ‘no-deny’ policy for settlements
CFTC Chairman Mike Selig says the rescission of its “no-deny” policy means it now has more flexibility when settling enforcement actions.
The Commodity Futures Trading Commission (CFTC) has officially rescinded its "no-deny" policy for enforcement settlements, following a similar move by the Securities and Exchange Commission earlier this year. CFTC Chairman Mike Selig announced the policy change, stating that the elimination gives the agency greater flexibility when negotiating settlement agreements with defendants in enforcement actions.
The "no-deny" policy previously allowed companies and individuals to settle enforcement cases without admitting or denying wrongdoing, while still paying fines and agreeing to comply with regulations. This approach was widely used across financial regulators as a way to resolve cases efficiently without lengthy court battles. The SEC abandoned its version of this policy in recent months as part of broader enforcement reforms under the current administration.
The policy shift signals a more aggressive regulatory stance that could significantly impact how crypto firms and traditional financial institutions approach compliance and settlement negotiations. Companies facing CFTC enforcement actions may now need to either admit fault as part of settlement agreements or prepare for more contentious legal proceedings, potentially increasing both costs and reputational risks.
Market participants should monitor how this change affects ongoing and future enforcement cases, particularly in the cryptocurrency sector where the CFTC has been increasingly active. The new approach may lead to longer settlement negotiations and could influence how firms structure their compliance programs.
Source: Cointelegraph
