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CFTC seeks to erase deal
The U.S. Commodity Futures Trading Commission asked a judge to vacate a $5 million penalty it imposed on Gemini Trust Company, saying the agency should never have filed the complaint that led to a January 2025 consent order.
The CFTC and Gemini jointly filed a motion seeking relief from judgment that would undo the consent order, with the regulator now saying it “should not have been filed.”
The dispute began in June 2022 when the CFTC sued Gemini for allegedly making false or misleading statements about Bitcoin futures contract manipulation risks, and Gemini settled in January 2025 with a $5 million civil penalty and permanent injunction.
In its Wednesday statement, the CFTC said it “concluded the complaint should not have been filed — and would not have been under current enforcement standards,” and it argued that maintaining the consent order’s prospective provisions would be inconsistent with how other regulated entities are treated.
Whistleblower, fraud claims
The CFTC’s reversal centers on its review of the 2022 case, including its conclusion that the original complaint was largely based on a whistleblower’s account “known to be lacking in credibility.”
In jointly filed court papers, the CFTC and Gemini said regulators “resorted to inappropriate tactics” to bring the lawsuit and “extract a settlement from Gemini.”
The filings also contend Gemini was the victim of fraud involving the company’s former chief operating officer and two customers who allegedly received fraudulent rebates from the exchange, rather than a perpetrator of the misleading-statement allegations tied to bitcoin futures.
The Hill reported that the CFTC argued the settlement would “continue to have a chilling effect on both Gemini’s legitimate business operations and routine interactions” with other companies and the regulator itself.
Penalty refund and policy shift
While the CFTC is seeking to erase the settlement, a spokesperson told The Hill that Gemini paid the penalty and that the agency is not rescinding the payment, meaning the funds should not have to be returned.
CNN reported that Gemini and the agency agreed the $5 million penalty would not be refunded to the company, even as the regulator argued its prior enforcement process was flawed.
The reversal is tied to changes at the top of the agency, with Michael Selig appointed as CFTC Chair in December 2025 after the White House withdrew Brian Quintenz’s nomination in September.
CNN also tied the case to politics, noting the Winklevoss brothers were prominent donors to President Donald Trump’s 2024 campaign and that each sought to donate $1 million in bitcoin to Trump’s campaign ahead of the 2024 election, though those were refunded for exceeding the maximum amount allowed by law.
