On October 15, 2026, Judge Alvin Hellerstein denied a joint motion by the CFTC and Gemini Trust Company to vacate a $5 million settlement signed in January 2025. The ruling keeps the permanent injunction and compliance restrictions on the New York-based platform in force, despite the regulator’s own reversal on the case.
🔑 Key takeaways
- Judge Hellerstein (SDNY) refused to reopen the January 6, 2025 consent order between the CFTC and Gemini.
- The $5 million civil penalty already paid will not be refunded, and the permanent injunction stays in place.
- Yet in May 2026, the CFTC itself admitted the complaint should never have been filed under its current standards.
- The court reminded parties that a regulator’s changed view does not, on its own, justify vacating a consented judgment.
- The case highlights how the Trump administration’s pro-crypto stance is reshaping ongoing enforcement actions.
A four-year-old complaint over a Bitcoin futures contract
It all started in June 2022, when the Commodity Futures Trading Commission sued Gemini Trust Company, the exchange founded by twins Tyler and Cameron Winklevoss. The regulator accused the firm of providing inaccurate or misleading information between July and December 2017, during the review of a Bitcoin futures contract whose settlement was tied to Gemini’s auction mechanism.
The CFTC was probing the auction’s resilience to market manipulation — a question that had become central as regulated crypto venues expanded. The allegations covered pre-funding of trades, safeguards against self-trading, fee rebates, and actual trading volumes. Gemini consistently denied causing any manipulation or customer losses and fought the claims for nearly three years before settling.
The January 2025 deal: $5 million and an injunction
On January 6, 2025, the parties signed a consent order ending the litigation. It required Gemini to pay a $5 million civil penalty — fully paid — and imposed a permanent injunction barring the firm from making false or misleading statements to the CFTC. The deal was signed roughly three weeks before trial was set to begin, with no admission or denial of the allegations except as to jurisdiction and venue.
| Milestone | Date | Event |
|---|---|---|
| CFTC complaint filed | June 2022 | Allegations of misleading info (Jul–Dec 2017) |
| Consent order | Jan 6, 2025 | $5M penalty + permanent injunction |
| CFTC reversal | May 27, 2026 | Agency concludes complaint should not have been filed |
| Joint motion | May 28, 2026 | Filed under Rule 60(b)(5) or 60(b)(6) |
| Court decision | Oct 15, 2026 | Joint motion denied |
The settlement came at a pivotal moment, just months after Donald Trump returned to the White House and signed an executive order on digital financial technology on January 23, 2025.
The CFTC’s reversal and the joint bid to vacate
On May 27, 2026, the CFTC stunned the market by announcing that a thorough review of the case led to the view that it should not have been brought and would not align with its current enforcement standards. The agency identified six main issues:
- Reliance on a whistleblower whose credibility was known to be weak;
- Targeting Gemini even though the platform was itself a victim of internal fraud;
- Serious doubts about the strength of the evidence;
- Material withheld from a commissioner during the vote on the complaint;
- Litigation counsel invoking the deliberative process privilege to block Gemini’s defense;
- Staff exerting undue influence on the CFTC’s regulatory authority to create settlement leverage.
The next day, the CFTC and Gemini filed a joint motion to vacate the consent order — or, alternatively, to lift its prospective provisions. They agreed the $5 million already paid would not be refunded.
Judge Hellerstein shuts the door
In a measured but firm ruling, Judge Alvin Hellerstein rejected the parties’ positions. In his view, the regulator’s newly acquired knowledge of facts that existed at the time of settlement does not, by itself, justify relief.
“Newly acquired knowledge of facts that existed at the time the Consent Order was entered does not constitute a significant change in factual circumstances”
Judge Alvin Hellerstein, SDNY
“The CFTC’s present assessment that this action should not have been brought does not require vacatur or other relief”
Judge Alvin Hellerstein, SDNY
The judge added that Gemini’s claim that it did so under regulatory pressure did not show the consent was involuntary: the firm was represented by counsel and expressly settled. He noted that Gemini had contested the case for nearly three years and was already aware of internal issues, including fraud involving its former chief operating officer.
Hellerstein also rejected the Rule 60(b)(6) argument, ruling the catch-all provision cannot be used to bypass the one-year deadlines in other rules. He ordered the clerk to close both motions. The permanent injunction remains fully in force, along with Gemini’s commitment not to publicly deny the settlement’s findings.
A flagship example of Washington’s pro-crypto pivot
The ruling comes amid a fast-shifting regulatory landscape. Under the Trump administration, the CFTC has reopened several investigations, while the White House has pledged to make the United States the « crypto capital of the world ». The Winklevoss twins are vocal supporters of the president: Tyler Winklevoss helped block the confirmation of Brian Quintenz, originally picked to lead the CFTC. In September 2025, Quintenz accused the president of having been « misled » by the brothers. Michael Selig, a digital-asset-focused attorney, was ultimately nominated to head the agency.
Gemini is also moving fast. In September 2026, the firm listed on public markets as Gemini Space Station Inc., then launched a prediction market allowing users to bet on gold prices, sports outcomes, and economic data — an area the CFTC is watching closely. Denying the joint motion keeps a tight compliance frame around an actor whose political and commercial clout keeps rising.
Conclusion: a compliance frame that holds
By refusing to vacate the consent order, Judge Hellerstein sent a clear signal to the markets: even when a regulator reverses its own reading of the facts, consensual judgments do not vanish with political tides. For Gemini, the permanent injunction and the obligation not to deny the settlement’s findings will continue to constrain its regulatory communications.
Two scenarios loom. Gemini could simply live with the constraints and turn them into a credibility argument with institutional investors, or it could pursue narrower, more uncertain procedural avenues. Either way, the episode underscores that the line between enforcement policy and judgment stability remains a blind spot in US crypto regulation.
Sources
This article is for informational and educational purposes only. It does not constitute investment advice. Do your own research (DYOR) before making any decision.
