CFTC Seeks To Vacate $5 Million Gemini Penalty Against Winklevoss Twins

The US Commodity Futures Trading Commission is asking a judge to vacate a Biden-era penalty it imposed last year on cryptocurrency exchange Gemini Trust Company, a case run by Tyler and Cameron Winklevoss.

“The Commodity Futures Trading Commission joined Gemini on Wednesday in asking a judge to vacate a $5 million penalty against the cryptocurrency exchange”

Banking Dive

The CFTC said its request, filed late Wednesday, marks an extraordinary reversal after it accused Gemini in 2022 of making false statements tied to a bitcoin futures business it had sought to launch, and Gemini settled weeks before Trump took office by paying a $5 million penalty.

Banking Dive

In its statement, the CFTC argued, “These findings not only call into question the CFTC’s enforcement process in this instance but also demonstrate the necessity of the federal government’s revised enforcement approach and standards, including in the digital asset space,” and said Gemini and the agency have agreed the $5 million penalty would not be refunded.

CNN and CNBC both described the move as unusual, with CNBC quoting former CFTC chair Tim Massad saying, “it's very unusual for the CFTC to do this, to basically seek to vacate the judgment in a case that you brought.”

Banking Dive and The Hill both said the CFTC joined Gemini on Wednesday in asking a judge to vacate the consent order, arguing the complaint should not have been filed and that “inappropriate tactics” were used to bring the case and “extract a settlement from Gemini.”

Banking Dive reported the enforcement division based its complaint largely on a whistle-blower account that was not credible, and said the CFTC also concealed evidence from a CFTC commissioner ahead of a vote on whether to grant authority to pursue a case against Gemini.

CNBC

The Hill added that the CFTC argued the settlement will “continue to have a chilling effect on both Gemini’s legitimate business operations and routine interactions” with other companies and the regulator itself.

CNBC further reported that the January 2025 order included an injunction barring Gemini from making false statements to the agency, and that the $5 million already paid would not be returned if a judge signs off on the request to lift the consent order.

The CFTC’s effort to vacate the consent order centers on whether any remaining requirements—including injunctive relief—should continue after the agency concluded the complaint “should not have been filed — and would not have been under current enforcement standards.”

“The US Commodity Futures Trading Commission is asking a judge to vacate the Biden-era penalty that it imposed last year on a cryptocurrency exchange run by Tyler and Cameron Winklevoss — prominent donors to President Donald Trump’s 2024 campaign”

CNN

CoinDesk said that if the US District Court for the Southern District of New York grants the request to cancel the settlement and toss the case, the remainder of Gemini’s requirements under the agreement will be nullified, including its injunction preventing the company from making false or misleading statements to the commission in the future.

CNN and CNBC both tied the reversal to the Trump-era shift in crypto policy, with CNN saying the CFTC under Trump is “abruptly shifting its stance” and CNBC noting the agency is now run by Michael Selig, an appointee of President Donald Trump.

The political backdrop also includes the Winklevoss twins’ donations and personnel changes, with CNN reporting that each sought to donate $1 million in bitcoin to Trump’s 2024 campaign and that Trump’s original pick to run the CFTC, Brian Quintenz, was withdrawn in favor of Michael Selig in September.