CFTC Seeks to Vacate Gemini’s $5 Million Settlement in Major Reversal of Crypto Enforcement Case

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• CFTC and Gemini jointly filed a motion asking a federal court to vacate portions of a January 2025 consent order.
• The regulator said the original enforcement action would not have been brought under current agency standards following an internal review.
• Gemini has already paid the full $5 million civil penalty, but both parties are seeking removal of ongoing injunctions and prospective restrictions.
• The case originated from statements made in 2017 during the self-certification process for a bitcoin futures product.

The U.S. Commodity Futures Trading Commission (CFTC) and crypto exchange Gemini Trust Company have jointly asked a federal court to vacate key portions of a previously finalized $5 million settlement, marking a notable reversal in a long-running digital asset enforcement case.

In a motion filed on May 27, 2026, in the U.S. District Court for the Southern District of New York, the parties requested relief from parts of a January 2025 consent order that resolved the CFTC’s enforcement action against Gemini. The filing stated that, following an internal review, the agency concluded the original complaint would not have been pursued under current enforcement standards.

The request was submitted under Federal Rule of Civil Procedure 60(b), which allows courts to modify or vacate judgments under certain circumstances. The filing argued that continued enforcement of the order’s prospective provisions would no longer be equitable.

Background of the Gemini Enforcement Case

The dispute dates back to 2022, when the CFTC accused Gemini of making false or misleading statements to the regulator between July and December 2017 during the self-certification process for a bitcoin futures contract.

According to the original complaint, the statements involved issues related to market manipulation protections, prefunding requirements, fee rebates, liquidity conditions, and measures designed to prevent self-trading within Gemini’s bitcoin auction system.

Gemini agreed to settle the case in January 2025 without admitting or denying wrongdoing. Under the consent order, the company paid a $5 million civil monetary penalty and accepted a permanent injunction prohibiting false or misleading statements to the CFTC in future dealings with the agency.

The settlement concluded years of litigation tied to the regulator’s oversight of cryptocurrency-linked derivatives markets.

CFTC Review and Request for Vacatur

In the newly filed memorandum, the CFTC stated that a subsequent internal review raised concerns regarding aspects of the investigation and evidentiary record associated with the case. The filing noted that the agency reassessed the matter under updated enforcement priorities and standards.

The memorandum also referenced records obtained through Freedom of Information Act requests submitted by Gemini after the settlement was finalized. According to the filing, these materials contributed to the parties’ request for relief from the ongoing provisions of the consent order.

Gemini has already satisfied the $5 million monetary penalty imposed under the settlement. The joint motion primarily seeks to remove the permanent injunction and other forward-looking restrictions that remain in effect.

The filing comes amid broader shifts in U.S. digital asset regulatory policy following changes in agency leadership and evolving approaches toward crypto enforcement. Recent statements from regulators have emphasized focusing enforcement actions on fraud and customer harm while increasing reliance on rulemaking and supervisory frameworks. The court must still decide whether to grant the request to vacate portions of the consent order.

“The case would not have been brought under current enforcement standards,” the CFTC said in its court filing seeking relief from Gemini’s 2025 settlement order.

The agency’s statement marked a rare reversal of a finalized crypto enforcement action and highlighted shifting U.S. regulatory priorities toward digital assets.

The latest court filing also arrives amid heightened political attention surrounding U.S. crypto policy and regulatory enforcement. Former CFTC Commissioner Brian Quintenz, who had previously been nominated by President Donald Trump to lead the agency, said in posts on X last year that Gemini founders Cameron and Tyler Winklevoss had asked him to review the settlement. Quintenz stated that the brothers were dissatisfied after he declined to commit to any action beyond reviewing the case. Trump later withdrew Quintenz’s nomination less than three weeks afterward.

FAQs

1. Why does the CFTC want to vacate Gemini’s settlement now?
The CFTC said an internal review concluded the original enforcement action would not have been pursued under the agency’s current standards and enforcement priorities.

2. What was Gemini accused of in the original case?
The case centered on allegations that Gemini made misleading statements to the CFTC in 2017 during the approval process for a bitcoin futures product tied to its auction-based pricing system.

3. Has Gemini already paid the $5 million penalty?
Yes. Gemini has already paid the full $5 million civil monetary penalty required under the January 2025 settlement agreement.

4. What happens if the court approves the joint motion?
If the court grants the request, the permanent injunction and other ongoing restrictions tied to the settlement could be removed, though the monetary penalty would remain paid and satisfied.