A United States federal judge has turned down a shared petition from digital asset platform Gemini and the Commodity Futures Trading Commission to invalidate a $5 million agreement, even though the regulatory body admitted it would not have brought the lawsuit under present enforcement criteria.
On Thursday, US District Judge Alvin Hellerstein ruled that shifts in CFTC regulatory focus and accusations of wrongdoing within its enforcement branch did not warrant setting aside the January 2025 resolution.
On May 27, the CFTC and Gemini petitioned the court together to rescind the deal after an internal investigation revealed alleged misconduct by the agency’s enforcement staff, which involved depending on a dubious whistleblower, applying undue regulatory leverage, and trying to hide evidence.
This decision keeps in place a permanent court order stopping Gemini from delivering deceptive or inaccurate statements to the CFTC. The agreement additionally forbids Gemini from publicly contesting its conclusions, though the watchdog noted in June that it would abandon the enforcement of those limitations.
Gemini has already handed over the $5 million fine, which the CFTC previously mentioned to Cointelegraph would not be given back even if the agreement were undone.
Judge cites Gemini’s decision to settle before trial
The dispute revolved around the management of Gemini’s Bitcoin auction platform. Based on the January 2025 consent decree, the exchange omitted information that certain users executed trades with borrowed capital, that self-matching took place despite protective measures, and that specific traders secured preferential fee structures.
Gemini also provided trading volume statistics while failing to mention that portions of that volume stemmed from those exact activities.
Related: Better Markets says CFTC is ‘wrong agency’ to regulate retail crypto
Hellerstein pointed out that Gemini already understood the issues regarding the CFTC’s arguments when it opted to resolve the matter under three weeks prior to the trial date. Although the exchange subsequently acquired more internal CFTC files, the judge determined that this fresh material fell short of justifying the cancellation of a deal Gemini entered into willingly.
The magistrate additionally dismissed the claim that President Donald Trump’s executive order on digital assets and the agency’s updated enforcement strategy justified relief, noting they represented political shifts rather than a profound alteration in the law.
Past CFTC Chairman Timothy Massad previously described the watchdog’s attempt to undo a finalized case as “extraordinarily unusual,” sharing with Cointelegraph that the public “deserves a better explanation.”
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Originally published at https://cointelegraph.com/news/judge-rejects-cftc-gemini-5m-settlement-reversal?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound.
