TLDR
- A federal judge rejected the joint CFTC and Gemini request to overturn their January 2025 settlement.
- Gemini’s $5 million payment will not be refunded despite the regulator’s reversal of its enforcement position.
- Judge Hellerstein ruled that later disclosures and changes in federal crypto policy did not justify relief.
- The court’s permanent injunction against false or misleading statements to the CFTC remains in effect.
- The CFTC’s June policy change means it will no longer enforce existing restrictions against publicly denying settlement findings.
CFTC and Gemini failed to overturn their $5 million settlement after a federal judge rejected their joint request on October 15. The decision keeps a permanent court order against the cryptocurrency exchange despite changed enforcement priorities.
US District Judge Alvin Hellerstein said neither alleged problems with the investigation nor shifts in Washington justified reopening the case. Gemini paid the penalty before seeking relief, and the money will not be returned.
Why CFTC and Gemini sought relief
The CFTC sued Gemini in 2022 over statements about a proposed Bitcoin futures contract. The court entered a $5 million settlement in January 2025, shortly before trial.
In May, the regulator joined Gemini’s request to cancel the order. Its internal review questioned a whistleblower’s reliability and identified possible misuse of regulatory pressure. The agency said investigators withheld evidence from a commissioner before the lawsuit.
The agency announced the request on X, saying the case would not meet its current standards. Former acting chair Caroline Pham described the regulator’s existing authority over crypto trading under federal law.
Judge rejects claims of changed circumstances
Hellerstein said Gemini knew about weaknesses in the case before accepting the settlement. The judge found that later-obtained documents did not change the facts as they existed when they settled.
The court also rejected the claim that President Donald Trump’s crypto policies created a legal reason to cancel the order. Gemini accepted the agreement voluntarily after nearly three years of litigation.
Injunction remains as oversight changes
The ruling keeps Gemini under a permanent ban on misleading statements or withholding important information from the CFTC. The regulator has proposed new rules for event contracts amid state challenges.
The original case covered borrowed trading funds, self-trading safeguards, fee rebates, and auction volumes. The consent order also bars public denials, though the CFTC will not enforce that clause.
Gemini has since expanded into prediction markets through its Gemini Titan platform. Tyler Winklevoss wrote on X in February that the CFTC has federal authority over these markets.
Kalshi’s chief executive also warned that US prediction markets could move abroad amid disputes over state rules. His comments came as courts and regulators considered who can oversee event contracts.
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