CFTC Wants to Drop Gemini’s $5M Settlement. A Judge Just Said No

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In brief

A federal judge denied a rare joint motion from Gemini and the CFTC to vacate the $5 million settlement the exchange agreed to in January 2025.
The ruling keeps a permanent injunction barring Gemini from making false statements to the CFTC; the exchange already paid the $5 million, which won’t be refunded.
It’s a rare case of a court holding firm as a regulator retreats from its own case, amid the CFTC’s broader pro-crypto shift.

A federal judge has refused to let the Winklevoss twins’ crypto exchange Gemini walk back a $5 million settlement with the Commodity Futures Trading Commission, even though the regulator itself had joined the exchange in asking him to toss it out.

In a ruling issued Oct. 15, U.S. District Judge Alvin Hellerstein of the Southern District of New York denied the unusual joint motion to vacate a consent order Gemini agreed to in January 2025.

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He found that neither a shift in the CFTC’s enforcement priorities under the current administration nor allegations of misconduct inside the agency’s enforcement division met the legal bar to reopen a signed judgment.

“Neither of these two grounds is sufficient to support vacating the settlement,” Hellerstein wrote, noting that Gemini voluntarily signed the deal roughly three weeks before trial.

The dispute dates to 2022, when the CFTC charged Gemini with making false or misleading statements to the agency in connection with a proposed Bitcoin futures product. The two sides reached the $5 million settlement in early 2025, then stunned observers in May by jointly moving to undo it, arguing the original enforcement effort had violated principles of fair enforcement.

Hellerstein wasn’t persuaded. The ruling leaves intact a permanent injunction barring Gemini from making false or misleading statements to the CFTC, and from publicly denying the settlement’s findings, though the agency has said it would no longer enforce that gag-style provision.

Gemini has already paid the $5 million penalty, and the parties previously said it would not be refunded even if the motion succeeded, so the money stays with the government.

The outcome is a rare instance of a court holding firm against a regulator trying to retreat from its own case, and it leaves a compliance overhang on Gemini just as the exchange expands its CFTC-regulated business. Gemini recently won approval from the Mike Selig-led CFTC to broaden its prediction-market and perpetual-futures offerings.

The episode also underscores how dramatically the CFTC’s posture toward crypto has shifted. The agency has moved aggressively to accommodate the industry, issuing no-action relief letting crypto apps offer regulated derivatives and floating a plan to bring crypto exchanges under federal oversight, a softer stance that, in this case, ran headfirst into a judge unwilling to rewrite a closed deal.