The U.S. Securities and Exchange Commission has officially dropped a long-standing rule that prevented people and companies from publicly denying the agency’s accusations after settling enforcement cases.
The change, announced on Monday, removes a policy first adopted in 1972. Under that old rule, anyone who settled with the SEC had to agree not to challenge the claims in public. Regulators admitted the policy made it seem like the agency was trying to shield itself from criticism. It also put the SEC out of step with how most other federal regulators handled settlements.
Chair Atkins on the repeal
SEC Chair Paul Atkins said in a statement that for over 50 years, the commission required defendants to promise not to deny the allegations as part of a settlement. He expressed satisfaction that the policy is now gone. The change, he explained, ends the prohibition on defendants speaking out.
Under the old framework, companies or individuals could not deny the allegations themselves. They also could not let others issue denials on their behalf. The original text of the rule said the agency adopted it to avoid giving the impression that sanctions were being imposed for conduct that never actually happened.
What happens now
Even with this change, the SEC made clear that it may still demand some defendants admit wrongdoing or liability in future settlements. Existing no-deny provisions already in place will no longer be enforced, the agency noted.
Commissioner Hester Peirce backed the decision. She argued that silencing defendants did not help market transparency or protect investors. In her view, settlements where one party is forced into silence do not serve the markets or the SEC’s mission. She added that transparent enforcement helps free markets thrive, and letting both sides speak freely improves transparency.
Peirce also said the SEC’s enforcement staff should be confident enough in their investigations without relying on restrictions on defendants’ speech after deals are made. She had criticized the policy before, especially in early 2024 when the agency under former Chair Gary Gensler went after crypto firms aggressively. At that time, she felt the practice hurt regulatory integrity.
Crypto enforcement context
Crypto companies have challenged the no-deny rule for years, particularly as the SEC ramped up enforcement against digital asset firms. In 2023 alone, the agency brought 46 crypto-related actions and collected $281 million in penalties through settlements.
More recently, the SEC told the White House it planned to drop the rule and sent its proposal to the Office of Management and Budget earlier this month. Since President Donald Trump returned to office, the SEC has dropped or settled several major crypto cases from the Biden era. A notable resolution came in May 2025, when the agency settled with Ripple Labs for $50 million.
