U.S. District Judge Alvin K. Hellerstein of the Southern District of New York rejected a joint motion by Gemini Trust Company and the CFTC to vacate a consent order from January 2025, upholding a $5 million civil monetary penalty and permanent injunction against the Winklevoss-led exchange.
The ruling, issued on October 15, 2026, dismissed arguments that post-settlement evidence and shifting enforcement priorities warranted reopening the case under Federal Rule of Civil Procedure 60. Judge Hellerstein found that the changes cited by both parties did not meet the strict legal standard required to reopen a final judgment.
Background of the Settlement
The dispute originated in 2017 with statements Gemini made to the CFTC during a Bitcoin futures self-certification review. The CFTC alleged the statements were false or misleading and filed a formal complaint in June 2022. After years of litigation, Gemini agreed to settle roughly three weeks before trial was scheduled. The settlement was entered in January 2025 without Gemini admitting or denying the allegations, and the full $5 million penalty was paid at that time.
Arguments for Vacating the Order
The CFTC later concluded through an internal review that the original complaint should not have been filed and characterized Gemini as a fraud victim in related matters. On this basis, the agency joined Gemini in May 2026 to seek relief from the judgment. The joint motion argued that policy changes and evidence discovered after the settlement made continued enforcement inequitable.
Impact on Gemini's Operations
Despite the ruling, Gemini has continued expanding its regulated business, including obtaining a CFTC license for derivatives trading and partnering with Apex Fintech on prediction markets. However, the permanent injunction restricts statements Gemini can make to the CFTC, creating a compliance constraint as the exchange pursues new product approvals and licensing discussions.
The court's decision underscores that settlements entered through final judgment maintain legal force independent of subsequent regulatory or policy changes.
