A federal judge in New York has refused to let Gemini Trust Company and the Commodity Futures Trading Commission undo a settlement agreement, preserving a $5 million civil penalty and permanent injunction against the cryptocurrency exchange.
On October 15, 2026, US District Judge Alvin K. Hellerstein denied the joint motion filed by both Gemini and the CFTC to vacate the consent order entered in January 2025. The judge found that the two sides had not met the strict requirements under Federal Rule of Civil Procedure 60, which governs requests to overturn final judgments.
The Court's Reasoning
Judge Hellerstein emphasized the timing of the settlement. Gemini voluntarily agreed to the consent order just three weeks before the case was scheduled to go to trial.
The arguments for reversing the judgment centered on internal CFTC reviews and policy shifts regarding digital assets. The court determined these factors were insufficient grounds for reopening a settled judgment.
The $5 million penalty has already been paid. The primary stakes in the motion were the consent order itself and the permanent injunction, which bars Gemini from making false or misleading statements to the CFTC.
Background of the Dispute
The CFTC filed its lawsuit in 2022, alleging that Gemini made false or misleading statements in 2017 concerning a Bitcoin futures contract that relied on Gemini's auction prices for settlement.
After the parties settled in January 2025, the CFTC conducted an internal review. That review suggested the original complaint should not have been filed and indicated the case might not be pursued under the agency's current enforcement standards. The review cited a whistleblower it described as not credible and a shift in enforcement priorities.
Implications
Gemini must continue operating under the permanent injunction prohibiting false or misleading statements to regulators. The company now faces the situation of having both an internal CFTC review questioning the case and a binding court order upholding the settlement.
For the CFTC, the ruling establishes limits on how far policy changes can reach. While agencies can revise enforcement priorities and decline to bring similar cases in the future, the court made clear that reaching back to erase a judgment already obtained is a different matter, as such judgments belong to the court rather than the agency.
