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- A federal judge rejected a joint request by Gemini Trust and the CFTC to undo their January 2025 settlement.
- Judge Alvin Hellerstein ruled that the parties failed to meet the requirements for reopening a final judgment.
- The ruling leaves a permanent injunction in place alongside the $5 million penalty Gemini already paid.
A federal judge has rejected a joint request by Gemini Trust and the Commodity Futures Trading Commission (CFTC) to undo their January 2025 settlement. The Oct. 15 ruling leaves a permanent injunction in place alongside the $5 million penalty Gemini has already paid.
Hellerstein Rejects Grounds for Reopening Judgment
U.S. District Judge Alvin Hellerstein found that the parties had not met the requirements for reopening a final judgment. He said the CFTC’s revised enforcement priorities did not amount to a significant change in law.
The judge also rejected arguments based on internal materials disclosed after the settlement. Those materials concerned circumstances that already existed when Gemini agreed to the deal, rather than a subsequent factual change that made the order unfair to enforce.
Hellerstein noted that Gemini had contested the case for approximately three years with legal representation before choosing to settle shortly before trial. He wrote:
“The parties’ assertion that Gemini settled under regulatory pressure does not establish that its consent was involuntary.”
CFTC Reverses Its Position After Internal Review
The CFTC joined Gemini’s request in May after reviewing the investigation, evidence, charging decision and litigation tactics. The agency concluded that the complaint should not have been filed and would not have been brought under its current enforcement standards.
Its review questioned the credibility of a whistleblower and the strength of the evidence. The regulator also said requested evidence had been withheld from a commissioner and that personnel had improperly used regulatory authority to gain settlement leverage.
The parties sought relief from the judgment’s continuing restrictions. They agreed that Gemini would not receive a refund of the penalty, making the injunction and other ongoing obligations the practical focus of the request.
Gemini’s Settlement Followed a Bitcoin Futures Review
The CFTC sued Gemini in June 2022 over statements made during its review of a proposed Bitcoin futures contract. The contract would have used prices from Gemini’s Bitcoin auction to determine settlement values.
The dispute concerned information supplied in 2017 about customer funding, safeguards against self-trading, fee arrangements and trading volume. The CFTC said those representations were material to its assessment of whether the proposed contract could be manipulated.
The court entered the consent order on Jan. 6, 2025. Gemini settled without admitting or denying the complaint’s allegations and accepted an injunction against false or misleading statements or omissions to the CFTC.
Hellerstein said the regulator remains free to consider its current policies when deciding whether to seek enforcement of the order. Its changed assessment of the case, however, did not require the court to set the judgment aside.
