A US federal judge has rejected a joint request by crypto exchange Gemini and the Commodity Futures Trading Commission (CFTC) to overturn a $5 million settlement, even though the regulator concluded it would not have pursued the case under its current enforcement standards.
On Thursday, US District Judge Alvin Hellerstein ruled that changes in CFTC enforcement priorities and allegations of misconduct by the regulator's enforcement division did not justify overturning the January 2025 settlement. The CFTC and Gemini had jointly asked the court on May 27 to reverse the settlement after an internal agency review found alleged misconduct by the enforcement division, including reliance on a questionable whistleblower, improper regulatory pressure, and efforts to prevent evidence disclosure.
Settlement Remains Intact
The ruling leaves in place a permanent injunction barring Gemini from making false or misleading statements to the CFTC. The settlement also prohibits Gemini from publicly denying the CFTC's findings, although the regulator stated in June it would no longer enforce such restrictions.
Gemini has already paid the $5 million penalty. The CFTC previously indicated the penalty would not be refunded even if the settlement were overturned.
Details of the Original Case
The case centered on how Gemini operated its Bitcoin auction. According to the January 2025 consent order, the exchange failed to disclose that some customers traded using borrowed funds, that self-trading had occurred despite safeguards, and that certain traders received special fee arrangements. Gemini also submitted trading volume data without disclosing that some activity involved these practices.
Judge's Reasoning
Hellerstein noted that Gemini was already aware of problems with the CFTC's case when it agreed to settle less than three weeks before trial. Although the exchange later obtained additional internal CFTC documents, the judge ruled the new information was insufficient to overturn a settlement Gemini had voluntarily accepted.
The judge also rejected arguments that President Donald Trump's digital asset executive order and the regulator's new enforcement approach warranted relief, stating they reflected changes in policy rather than significant changes in law.
