Gemini Asks Court for a Do-Over, Judge Says Nice Try 🚫

A US federal judge has rejected a joint request by crypto exchange Gemini and the Commodity Futures Trading Commission (CFTC) to vacate a $5 million settlement and a permanent injunction stemming from allegations that Gemini misled the regulator about its Bitcoin auction operations. US District Judge Alvin K. Hellerstein, of the Southern District of New York, issued the ruling on October 15, 2026, denying the motion filed on May 27, 2026 in which both parties asked the court to undo the January 2025 consent order.

Under Federal Rule of Civil Procedure 60, Gemini and the CFTC argued that post-settlement developments warranted relief. The arguments cited an internal CFTC review concluding the original complaint should not have been filed, the regulator's subsequent characterization of Gemini as a "fraud victim" in related matters, alleged reliance on a "questionable" whistleblower, claims of improper regulatory pressure, and efforts to prevent disclosure of evidence. The parties also pointed to President Donald Trump's digital asset executive order and the CFTC's updated enforcement approach.

Hellerstein rejected each ground. He ruled that the new information did not meet the strict standard required under Rule 60 and that the cited enforcement shifts amounted to policy changes rather than a "significant change in law." The judge emphasized that Gemini was aware of problems with the CFTC's case when it agreed to settle, less than three weeks before trial, and that the exchange had voluntarily accepted the consent order. Even with additional internal CFTC documents later obtained by Gemini, the court found the evidence insufficient to overturn the settlement. The ruling leaves intact a permanent injunction barring Gemini from making false or misleading statements to the CFTC, as well as a provision prohibiting Gemini from publicly denying the order's findings, a restriction the regulator said in June it would no longer enforce. Gemini has already paid the $5 million penalty, which the CFTC previously said would not be refunded even if the order were vacated.

The January 2025 consent order found that Gemini failed to disclose that some customers traded using borrowed funds, that self-trading had occurred despite safeguards, and that certain traders received special fee arrangements. The consent order also found that Gemini submitted trading volume data without disclosing these practices, with public statements including representations about $BTC and other digital asset trading.

The decision preserves a compliance overhang as Gemini expands into CFTC-regulated derivatives and prediction markets through its Apex Fintech partnership. Former CFTC Chair Timothy Massad previously called the regulator's move to reverse a settled case "extraordinarily unusual," saying the public "deserves a better explanation." The CFTC, Gemini Trust Company, and counsel for the parties did not immediately comment on the ruling.