A US federal judge has dismissed a request from crypto exchange Gemini and the Commodity Futures Trading Commission (CFTC) to void a $5 million settlement, despite the regulator admitting it would not have pursued the case under current standards.
On Thursday, US District Judge Alvin Hellerstein ruled that changes in the CFTC’s enforcement priorities and allegations of misconduct within its enforcement division did not justify overturning the January 2025 settlement. The CFTC and Gemini had jointly asked the court to undo the settlement after an internal review uncovered alleged misconduct, including reliance on a questionable whistleblower and improper regulatory pressure.
The ruling upholds a permanent injunction barring Gemini from making false or misleading statements to the CFTC. The settlement also prohibited Gemini from publicly denying the regulator’s findings, though the CFTC later said it would no longer enforce that restriction. Gemini has already paid the $5 million penalty, which the CFTC confirmed would not be refunded even if the settlement were overturned.
The case revolved around Gemini’s Bitcoin auction operations. The January 2025 consent order found that the exchange failed to disclose that some customers traded using borrowed funds, engaged in self-trading despite safeguards, and offered special fee arrangements to certain traders. Gemini also submitted trading volume data without disclosing these practices.
Judge Hellerstein noted that Gemini was aware of issues with the CFTC’s case when it agreed to settle, just weeks before trial. Although Gemini later obtained additional internal CFTC documents, the judge ruled that the new evidence was insufficient to overturn the settlement. The judge also rejected arguments that President Donald Trump’s digital asset executive order or the CFTC’s new enforcement approach warranted relief, calling them policy changes rather than legal ones.
Former CFTC Chair Timothy Massad previously described the regulator’s attempt to reverse a settled case as “extraordinarily unusual,” stating that the public deserved a better explanation.