Judge rejects Gemini and CFTC bid to void $5 million settlement

A federal judge refused to let the Winklevoss-owned crypto exchange Gemini walk back a $5 million settlement with the Commodity Futures Trading Commission, the federal agency that oversees U.S. derivatives markets, even though the regulator joined the exchange in asking him to toss it out.

In a ruling issued Oct. 15, U.S. District Judge Alvin Hellerstein of the Southern District of New York denied the joint motion to vacate a consent order Gemini agreed to in January 2025, Decrypt reported.

The case stemmed from the CFTC's review of a proposed bitcoin futures product and allegations that Gemini misled regulators, CoinDesk reported. The CFTC alleged that Gemini made false or misleading statements to the agency about the product, Decrypt reported. The exchange settled for $5 million three weeks before trial without admitting or denying the allegations, then stunned observers in May by jointly asking to undo the deal with the CFTC, arguing the original enforcement effort had violated principles of fair enforcement.

Hellerstein found that neither a shift in the CFTC's enforcement priorities under the current administration nor allegations of misconduct inside the agency's enforcement division met the legal bar to reopen a signed judgment. "Neither of these two grounds is sufficient to support vacating the settlement," he wrote. The judge noted that Gemini litigated the case for roughly three years and "made the calculated decision to settle the case shortly before trial."

Gemini had argued in its May motion that it was coerced into settling, a claim the judge also rejected, CoinDesk reported. Hellerstein weighed the length of the litigation and the timing of the deal and concluded the exchange had chosen to settle rather than proceed to trial. The order denying the motion is docket entry 223 in the Southern District of New York case.

The ruling leaves intact a permanent injunction barring Gemini from making false or misleading statements to the CFTC and from publicly denying the settlement's findings, though the agency has said it would no longer enforce that gag-style provision. Gemini has already paid the $5 million penalty, and the parties had said it would not be refunded even if the motion succeeded, so the money stays with the government.

Gemini, founded by Cameron and Tyler Winklevoss, can still operate in the United States and introduce new products, but it must live with the terms of the 2025 settlement as it shifts its business toward the American market, CoinDesk reported. The ruling lands weeks after Gemini won approval from the CFTC, now led by Mike Selig, to broaden its prediction-market and perpetual-futures offerings.

The decision stands out because a friendlier posture toward crypto in Washington does not automatically erase earlier court judgments, even when the regulator and the company agree they should be withdrawn. CoinDesk reported that the ruling shows the change in regulatory tone is not retroactive. Decrypt described the outcome as a rare case of a court holding firm while a regulator retreats from its own case.

The CFTC under Selig has moved to accommodate the industry, issuing no-action relief that lets crypto apps offer regulated derivatives and floating a plan to bring crypto exchanges under federal oversight, Decrypt reported. None of that changed the judge's reading of the closed settlement, and the exchange's injunction and paid penalty remain part of its record.

Gemini announced earlier this year that it planned to exit the United Kingdom, European Union and Australia and cut 25% of its workforce as it moved resources toward the U.S. market and prediction markets, CoinDesk reported. The company said it would continue operating in Singapore. Gemini did not respond to a request for comment on the ruling, CoinDesk reported.