A federal judge in New York denied on Friday a joint request by crypto exchange Gemini and the Commodity Futures Trading Commission (CFTC) to vacate a $5 million settlement reached in January 2025. Judge Alvin Hellerstein’s ruling keeps the consent order intact despite the Trump administration’s sweeping pro-crypto policy shift.
🔑 Key Takeaways
- Judge Hellerstein denied the joint Gemini-CFTC request to vacate the $5 million settlement
- The CFTC acknowledged inappropriate litigation tactics by its enforcement division, but the judge deemed the argument insufficient
- Gemini argued it settled under coercive regulatory pressure after nearly three years of litigation
- The change in administration and Trump’s pro-crypto stance does not constitute a legal basis to undo a voluntary settlement
- Tyler Winklevoss reportedly helped derail Brian Quintenz’s confirmation as CFTC chair, per Bloomberg
A settlement challenged twice
The case traces back to a complaint filed by the CFTC in June 2022. The regulator accused Gemini of providing inaccurate and misleading information during the agency’s review of a proposed bitcoin futures contract. Between July and December 2017, the platform had transmitted data regarding its bitcoin auction system and its trading mechanisms. According to the original complaint, Gemini made misleading statements about trading volumes, client financing arrangements, and safeguards against manipulation. The regulator alleged that certain statements about liquidity and trading activity did not accurately describe the platform’s actual operations.
After years of litigation, the parties reached a settlement in January 2025, roughly three weeks before the scheduled trial date. Gemini agreed to pay the $5 million civil penalty, already remitted, and to comply with a permanent injunction barring the company from making false or deceptive statements to the regulator. The settlement also prohibited Gemini from publicly denying the findings of the agreement, although the CFTC indicated in June 2026 that it would no longer enforce this restriction.
On May 27, 2026, the CFTC and Gemini filed a joint motion to vacate the settlement. The CFTC stated that an internal review had revealed inappropriate litigation tactics by its Enforcement Division. The regulator asserted that the case would not have been brought under the Trump administration, which has adopted a markedly more favorable posture toward digital assets. The CFTC further disclosed that its original complainant, a whistleblower, had credibility issues that staff had been aware of but that enforcement proceeded regardless. The agency also alleged that relevant evidence had been withheld from a commissioner before the vote authorizing the filing of the complaint.
For its part, Gemini argued that it had accepted the settlement under coercive regulatory pressure. In June 2025, the platform filed a 13-page complaint with the agency’s Inspector General, criticizing the conduct of the initial investigation. The Winklevoss twins, Gemini’s founders, also submitted additional documents post-settlement that they claim corroborate their position.
The Hellerstein ruling: a consent order holds firm
In his decision, Judge Alvin Hellerstein of the U.S. District Court for the Southern District of New York found that the arguments advanced by both parties were insufficient to warrant judicial relief. The judge rejected each claimed ground point by point.
On the CFTC’s procedural error arguments, the judge wrote that newly acquired knowledge of facts that existed at the time the consent order took effect does not constitute a material change in factual circumstances. Likewise, the CFTC’s current assessment that the action should not have been brought does not require vacatur or any other relief. In other words, the regulator’s belated regret is not grounds to erase a court-entered voluntary agreement.
“Newly acquired knowledge of facts that existed at the time the consent order took effect does not constitute a material change in factual circumstances.”
Judge Alvin Hellerstein, S.D.N.Y.
Regarding Gemini’s position, the judge noted that the platform had accepted the settlement voluntarily, after contesting the regulator’s allegations for nearly three years. Gemini made the calculated decision to settle shortly before trial, he stated. On the documents Gemini obtained after the ruling, the judge found that additional evidence received post-settlement may have caused Gemini to regret accepting the settlement, but this did not create a post-judgment change in factual circumstances rendering continued enforcement of the consent order inequitable.
“Gemini made the calculated decision to settle the case shortly before trial.”
Judge Alvin Hellerstein, S.D.N.Y.
Former CFTC Chairman Timothy Massad had previously weighed in on the unusual nature of the joint motion to vacate a settlement that both parties had freely agreed to.
“It is extraordinarily unusual. The public deserves a better explanation.”
Timothy Massad, Former CFTC Chairman
The political backdrop
Political context has played a decisive role in this case. Tyler and Cameron Winklevoss, Gemini’s twin founders, are major supporters of President Trump. According to Bloomberg News, Tyler Winklevoss reportedly helped derail the confirmation of Brian Quintenz, Trump’s first pick to lead the CFTC. In September 2025, Quintenz stated on social media that the president « could have been deceived » by the Gemini brothers, sharing screenshots of messages he claimed to have exchanged with Tyler Winklevoss. Trump subsequently nominated Michael Selig, a crypto-focused attorney, to lead the agency.
In January 2025, the Trump administration signed an executive order on digital financial technology, marking a turning point in federal policy toward digital assets. Financial regulators have since executed a 180-degree reversal in the enforcement of rules governing digital asset markets. The president has committed to making the United States the « crypto capital of the world», a mandate now shaping the strategy of both the CFTC and the SEC.
Gemini went public in September 2026, trading under the name Gemini Space Station Inc. The platform has since launched a prediction market business, allowing clients to trade contracts tied to future events, from gold prices to sports outcomes. This expansion reflects the rapid growth of the crypto ecosystem since Washington adopted its favorable posture.
What the ruling means going forward
Judge Hellerstein’s denial leaves the January 2025 consent order fully in effect. This includes the $5 million penalty already paid, the permanent injunction restricting Gemini’s statements to the commission, and the prohibition on publicly denying the agreement’s findings. The ruling also affirms that arguments based on changes in policy and administration do not constitute a legal basis for vacating a voluntary settlement before a federal court.
Conclusion
This ruling by Judge Hellerstein sends a clear signal at a time when the U.S. regulatory landscape is being reshaped at unprecedented speed. Even though the CFTC itself acknowledged internal procedural failures, the judiciary refused to reopen a consensual agreement on the basis of political changes. For Gemini, the $5 million settlement remains final, and the permanent injunction continues to apply. For the broader sector, the ruling serves as a reminder that a court-entered consent order carries considerable weight that no change in administration can simply undo.
Scenarios to watch include the possibility of a formal Gemini appeal to the U.S. Court of Appeals for the Second Circuit. Meanwhile, the CFTC’s disclosures about its internal failings could fuel new Congressional inquiries into the agency’s governance. Whatever the outcome, the case underscores the enduring tension between a political desire to foster a crypto-friendly framework and the judiciary’s independence when faced with attempts to retroactively revise legal agreements.
Sources
This article is published for informational and educational purposes only. It does not constitute investment advice in any way. Always do your own research (DYOR) before making any decisions.
