Judge Tells Gemini and CFTC: Sorry, You Settled It 🤷‍♂️

A federal judge has refused to vacate the $5 million consent order Gemini Trust Company entered with the Commodity Futures Trading Commission, keeping both the civil monetary penalty and the permanent injunction in force against the Winklevoss-led crypto exchange. U.S. District Judge Alvin K. Hellerstein of the Southern District of New York issued the ruling on October 15, 2026, denying a joint motion by Gemini and the CFTC to undo the January 2025 settlement. "Neither of these two grounds is sufficient to support vacating the settlement," Hellerstein wrote.

The court rejected arguments that an enforcement-priority shift under the current administration and alleged misconduct inside its Division of Enforcement met the standard required under Federal Rule of Civil Procedure 60. On May 27, the CFTC and Gemini had jointly asked the court to overturn the deal after an internal CFTC review concluded that the original complaint should not have been filed, that the agency had relied on a questionable whistleblower, that it applied improper regulatory pressure, and that it attempted to prevent disclosure of evidence. The agency also labeled Gemini a "fraud victim" in related matters. Hellerstein held that the change in posture reflected policy rather than a significant change in law and was insufficient grounds for relief, citing President Donald Trump's digital asset executive order and the CFTC's revised enforcement approach as policy shifts, not legal ones. Former CFTC Chair Timothy Massad previously called the regulator's effort to reverse a settled case "extraordinarily unusual," saying the public "deserves a better explanation."

Hellerstein also pointed to the timeline. Gemini agreed to the consent order less than three weeks before trial, after the exchange was already aware of problems with the CFTC's case, and the court ruled that subsequently obtained internal CFTC documents did not justify disturbing a settlement the exchange had voluntarily accepted. Under the January 2025 consent order, the CFTC charged Gemini with making false or misleading statements in connection with a proposed Bitcoin futures product, finding that the exchange had 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, while also submitting trading volume data without disclosing those practices.

The permanent injunction bars Gemini from making false or misleading statements to the CFTC and from publicly denying the settlement's findings, though the agency said in June that it would no longer enforce the gag-style restriction. Gemini has already paid the $5 million penalty, and the parties previously told the court the money would not be refunded even if the motion succeeded, so the funds remain with the government. The case is docketed in the U.S. District Court for the Southern District of New York.

The ruling preserves a compliance overhang just as Gemini expands its CFTC-regulated footprint through the Apex Fintech partnership, having recently won approval from the Mike Selig-led CFTC to broaden its prediction-market and perpetual-futures offerings. The CFTC has separately moved to accommodate the crypto industry, issuing no-action relief permitting crypto apps to offer regulated derivatives and floating a plan to bring digital asset exchanges under federal oversight, a softer posture that, in this case, ran into a judge unwilling to rewrite a closed deal involving $BTC-related trading data.