On October 15, a federal judge turned down a joint motion from Gemini Trust and the Commodity Futures Trading Commission (CFTC) to invalidate their $5 million settlement. The ruling leaves Gemini’s financial penalty and permanent injunction in place, even though the regulator pointed to misconduct within its initial probe.
U.S. District Judge Alvin Hellerstein determined that neither those allegations nor shifts in federal crypto policy warranted setting aside the January 2025 judgment.
Judge Rejects Bid to Reverse Gemini Settlement
Gemini and the CFTC asked the court to scrap the consent order after the agency re-evaluated the conduct of its enforcement team. They submitted a joint motion in May 2026, claiming that the ongoing restrictions were unfair.
Ultimately, Hellerstein concluded that their rationale failed to meet the legal threshold for relief. Prior to agreeing to a settlement on the eve of trial, Gemini had contested the charges for nearly three years.
The crypto exchange has already paid the $5 million penalty. Both sides also acknowledged that reversing the order would not prompt a refund. Instead, their petition focused on lifting the permanent injunction against making misleading statements to the CFTC.
The judge noted that subsequent disclosures might have influenced Gemini’s choice to settle. Even so, he ruled that second thoughts regarding a prior agreement did not provide grounds to strip away the court’s restrictions.
Hellerstein determined that the situation lacked a meaningful shift in circumstances or enforcement priorities to justify taking that step.
CFTC Review Raises Questions about Original Case
The regulatory body shifted its stance after auditing its investigation and litigation procedures. On May 27, it announced that the initial complaint should not have moved forward under current enforcement guidelines.
The agency expressed doubt regarding the reliability of a whistleblower who assisted the investigation. It also asserted that enforcement staff were aware of these credibility issues yet pressed forward with the lawsuit.
Additionally, the internal review indicated that attorneys may have kept relevant details from a commissioner prior to the vote approving the legal action. The agency further questioned whether Gemini was provided with necessary defense materials.
The CFTC claimed that specific enforcement personnel leveraged regulatory power improperly during settlement discussions. Gemini had previously submitted a 13-page grievance to the regulator’s inspector general in June 2025.
Despite these conclusions, Hellerstein dismissed the argument that improper pressure necessitated overturning the verdict. He observed that high-ranking Gemini representatives had knowingly supplied misleading material information during the regulatory review.
The litigants also pointed to shifts in government strategy following President Donald Trump’s inauguration, specifically citing his January 23, 2025, executive order concerning digital financial technology. The court deemed these developments inadequate.
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Bitcoin Futures Dispute Behind USD 5 Million Fine
In June 2022, the CFTC filed suit against Gemini over statements connected to a proposed Bitcoin futures contract. Between July and December 2017, the exchange provided data regarding its platform and its Bitcoin auction mechanism.
The planned product relied on Gemini auction figures to establish settlement benchmarks. Consequently, the commission evaluated whether the platform’s trading rules and safeguards could mitigate potential price manipulation.
The lawsuit targeted representations concerning trading volumes, customer funding structures, and safeguards against market manipulation. Investigators also looked into whether market participants held adequate funds prior to executing auction bids, contrary to Gemini’s representations.
Gemini contested the claims, asserting that its operations generated no manipulation or customer losses. The firm ultimately settled in January 2025 without admitting or denying the bulk of the consent order’s findings.
The settlement carried a $5 million civil penalty alongside a lifetime prohibition against providing false or misleading statements to the commission. Hellerstein’s October 15 ruling maintains both measures.
Initial reports indicated that neither Gemini nor the CFTC offered an immediate public statement regarding the decision.
Court Upholds Gemini Settlement
The federal court’s verdict preserves Gemini’s $5 million settlement despite the CFTC expressing misgivings about its initial inquiry. Hellerstein ruled that there was insufficient legal basis to overturn the consent order or eliminate its terms. The decision upholds the financial penalty and the permanent injunction, notwithstanding the regulator’s pivot in enforcement strategy.
