US CFTC Scraps Policy Barring Settlements with Defendants Denying Allegations
Hızlı Bakış
- The US CFTC has rescinded a 1998 policy that prevented settlements if defendants denied allegations.
- This change, mirroring the SEC's move, offers more flexibility in enforcement actions, particularly for crypto firms who argued the policy infringed free speech.
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The CFTC has rescinded a policy dating back to 1998 that prevented it from accepting lawsuit settlements if the defendant denied the agency's allegations. This move follows a similar decision by the SEC in May and aims to provide more flexibility in enforcement actions.
The US Commodity Futures Trading Commission has rescinded a long-standing policy that prevented it from accepting a lawsuit settlement if the defendant denied the agency’s allegations.
The CFTC said on Wednesday that it scrapped the policy, first adopted in 1998, because it “may have created an incorrect impression that the Commission is trying to shield itself from criticism.”
The language was similar to that provided by the US Securities and Exchange Commission when it rescinded a similar policy in May.
“For nearly three decades, the Commission has refused to settle cases unless the defendant promised not to publicly deny the Commission’s allegations,” CFTC Chairman Mike Selig said. “I am pleased that we are rescinding the no-deny policy consistent with regulators throughout the government.”
Crypto companies that have faced enforcement action by the CFTC or SEC have criticized the rule, claiming it restricted their right to free speech.
Source: CFTC
The CFTC said the policy change now gives it more flexibility when settling enforcement actions.
However, it will not enforce existing no-deny provisions and could still require some defendants to admit certain facts or liabilities when settling enforcement actions.
Under the Trump administration, the CFTC and SEC have rolled back enforcement actions taken against crypto companies that were launched under the Biden administration.
On Thursday, the CFTC sought to vacate its $5 million settlement with crypto exchange Gemini, a case that Selig claimed was “politically targeted.”
Tim Massad, who headed the CFTC under the Obama administration, told Cointelegraph on Friday that the agency’s choice to reverse the settlement was “extraordinarily unusual.”
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The CFTC will likely see an increase in settlement negotiations with crypto firms seeking more favorable terms.
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Further scrutiny will be applied to enforcement actions initiated under previous administrations, potentially leading to more vacaturs or revised settlements.
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Açık Sorular
- What specific criteria will the CFTC use to determine when to require admissions of fact or liability in future settlements?
- Will this policy change significantly impact the number or nature of enforcement actions against crypto companies?
- How will the vacating of the Gemini settlement influence future regulatory approaches to crypto exchanges?
- What was the 'politically targeted' aspect of the Gemini case that Chairman Selig alluded to?
