CFTC Revokes ‘No-Deny’ Policy for Lawsuit Settlements
- The CFTC has rescinded a policy from 1998 that barred settlements if defendants denied allegations.
- Chairman Mike Selig stated the change aligns with broader regulatory practices and enhances settlement flexibility.
- The agency will not enforce existing no-deny provisions but may require admissions of certain facts in some cases.
- The CFTC recently sought to vacate a $5 million settlement with crypto exchange Gemini, citing political targeting.
- Former CFTC Chairman Tim Massad described the reversal of the Gemini settlement as “extraordinarily unusual.”
This policy change is significant as it allows more freedom for defendants, particularly in the cryptocurrency sector, which has faced scrutiny from regulators like the SEC and CFTC. The shift reflects a move towards greater transparency and fairness in enforcement actions.
With this new flexibility, the CFTC aims to improve its approach to settlements while addressing past criticisms regarding free speech rights of defendants, including those involved in crypto exchanges like Gemini.(Source)
