A federal judge rejected a joint request from Gemini Trust and the Commodity Futures Trading Commission (CFTC) to undo their USD 5 million settlement on October 15. The decision keeps Gemini’s paid penalty and permanent injunction intact, despite the regulator’s claims of misconduct during its original investigation.
U.S. District Judge Alvin Hellerstein found that neither those claims nor shifts in federal crypto policy justified reopening the January 2025 judgment.
Gemini and the CFTC sought to cancel the consent order after the agency reassessed how its enforcement team handled the case. They filed their joint motion in May 2026, arguing that continued restrictions would be unfair.
Yet Hellerstein ruled that their arguments fell short of the legal standard for relief. Gemini had fought the allegations for nearly three years before agreeing to settle shortly before trial.
The exchange already paid the USD 5 million fine. Both parties also accepted that overturning the order would not trigger a refund. Instead, their request targeted the permanent injunction against misleading statements to the CFTC.
The judge acknowledged that later disclosures might have changed Gemini’s decision to settle. Still, he found that second thoughts about an earlier agreement did not justify removing the court’s restrictions.
In this case, Hellerstein found no sufficient change in circumstances or enforcement concerns to warrant that step.
The regulator reversed its position after reviewing its investigation and litigation practices. On May 27, it announced that its original complaint should not have proceeded under its current enforcement standards.
The agency questioned the credibility of a whistleblower who helped support the investigation. It also alleged that enforcement personnel knew about reliability concerns but continued pursuing the case.
Further, the review raised concerns that lawyers withheld relevant information from a commissioner before the vote authorizing the lawsuit. The agency also questioned whether Gemini received materials necessary for its defense.
The CFTC accused some enforcement staff of using regulatory authority improperly during settlement talks. Gemini had separately filed a 13-page complaint with the regulator’s inspector general in June 2025.
Despite those findings, Hellerstein rejected the claim that improper pressure required him to reverse the judgment. He found that senior Gemini officials had knowingly supplied misleading material information during the regulatory review.
The parties also cited changes in government policy after President Donald Trump took office. Their filing referenced his January 23, 2025, executive order on digital financial technology. The court found those changes insufficient.
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The CFTC sued Gemini in June 2022 over statements tied to a proposed Bitcoin futures contract. Between July and December 2017, the exchange supplied information about its platform and Bitcoin auction system.
The planned contract would use Gemini auction prices to determine settlement values. As a result, the regulator examined whether trading procedures and safeguards could limit possible price manipulation.
Its complaint challenged statements about trading volume, customer funding arrangements, and protections against manipulation. Investigators also examined whether traders had sufficient funds before placing auction orders, as Gemini had represented.
Gemini disputed the allegations and maintained that its actions caused no manipulation or customer losses. The exchange settled in January 2025 without admitting or denying most findings in the consent order.
The agreement imposed a USD 5 million civil penalty and a permanent ban on false or misleading representations to the regulator. Hellerstein’s October 15 decision leaves both provisions in force.
Neither Gemini nor the CFTC immediately issued a public response to the ruling, according to initial reporting.
The federal court’s decision preserves Gemini’s USD 5 million settlement despite the CFTC’s concerns about its original investigation. Hellerstein found insufficient grounds to overturn the consent order or remove its restrictions. The ruling maintains the financial penalty and permanent injunction, even after the regulator reconsidered its enforcement approach.