Even the CFTC Wanted Out, But the Judge Said No Dice 🎲

A federal judge has refused to overturn a $5 million settlement between crypto exchange Gemini and the Commodity Futures Trading Commission, leaving the permanent injunction and civil penalty in place despite an unusual joint request from both sides to vacate the deal. U.S. District Judge Alvin K. Hellerstein of the Southern District of New York issued the ruling on October 15, 2026, denying the motion to undo the consent order Gemini entered in January 2025. "Neither of these two grounds is sufficient to support vacating the settlement," Hellerstein wrote. The order bars 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 the non-denial provision.

The case 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 settled in early 2025 without admission or denial of the allegations, then in May jointly moved to undo the deal after an internal CFTC review found alleged misconduct by the agency's enforcement division, including reliance on a questionable whistleblower, improper regulatory pressure and efforts to prevent the disclosure of evidence. The CFTC also labeled Gemini a "fraud victim" in related matters. Under the current administration, the agency concluded the original complaint should not have been filed and shifted its enforcement priorities, including a digital asset executive order from President Donald Trump. Gemini has already paid the $5 million penalty, which the CFTC previously said would not be refunded even if the settlement were overturned, so the funds remain with the government.

Hellerstein ruled that Gemini voluntarily signed the deal roughly three weeks before trial and that policy shifts, whistleblower credibility issues and post-settlement evidence did not meet the strict standard under Federal Rule of Civil Procedure 60. "Gemini litigated the case for approximately three years, and then, despite the preceding facts, made the calculated decision to settle the case shortly before trial," the judge wrote. He also rejected Gemini's argument that regulators had coerced it into settling. Former CFTC Chair Timothy Massad previously called the regulator's move to reverse a settled case "extraordinarily unusual," telling reporters that the public "deserves a better explanation." The ruling leaves a compliance overhang on Gemini just as the exchange expands its CFTC-regulated business.

The Winklevoss-led exchange recently won approval from the Mike Selig-led CFTC to broaden its prediction-market and perpetual-futures offerings through a partnership with Apex Fintech, and earlier this year announced plans to exit the U.K., European Union and Australia while cutting 25% of its workforce as it shifts resources toward the U.S. market and prediction markets. Gemini said it would continue operating in Singapore. The decision is significant because it shows that a friendlier approach to crypto enforcement in Washington is not retroactive and does not automatically erase earlier court judgments, even when the regulator and the company agree they should be withdrawn.