Judge Rejects Gemini-CFTC Bid to Vacate Settlement

A federal judge has rejected a joint attempt by Gemini and the Commodity Futures Trading Commission to unwind a 2025 consent order resolving the regulator’s case against the cryptocurrency exchange. The October 15 ruling leaves the court-approved settlement and its prospective restrictions in place, despite the CFTC’s subsequent conclusion that it would not bring the same enforcement action under its current standards.

In an Opinion and Order, U.S. District Judge Alvin Hellerstein denied relief under Federal Rule of Civil Procedure 60(b). Gemini and the CFTC had jointly asked the court in May to vacate the consent order or, alternatively, its continuing provisions. The $5 million civil penalty had already been paid and was never expected to be refunded under the parties’ request.

The case originated from statements Gemini made during the CFTC’s review of a proposed Bitcoin futures contract whose settlement price would have depended on the Gemini Bitcoin Auction. The 2025 consent order found that Gemini made or omitted materially misleading information concerning prefunding, self-trading controls, fee arrangements and reported trading volume during that regulatory process.

CFTC Policy Shift Was Not Enough to Undo the Order

The unusual motion followed a CFTC review of its own handling of the litigation. The agency said in May that the original complaint relied heavily on a whistleblower whose credibility was questionable, raised concerns about evidence and internal decision-making, and involved inappropriate regulatory pressure. The CFTC ultimately concluded that the complaint should not have been filed and would not be pursued under its current enforcement standards.

Hellerstein, however, found that those conclusions did not satisfy the legal standard required to reopen a final judgment. The court said the underlying factual issues largely existed before the settlement and that Gemini had already litigated the case extensively before choosing to resolve it fewer than three weeks before trial. Newly obtaining additional information about pre-existing circumstances was not, in the judge’s view, a sufficient post-judgment change.

The court also rejected the argument that Gemini’s agreement had effectively been coerced by regulatory pressure. Hellerstein emphasized that Gemini was represented by counsel, had litigated for roughly three years and expressly stated in the consent order that it was entering the agreement voluntarily. The ruling treated the settlement as a deliberate legal choice rather than an agreement Gemini had no meaningful option but to accept.

That reasoning separates the case from the CFTC’s broader regulatory pivot. The agency has recently moved toward more formal crypto rulemaking under its existing authority, but a shift in enforcement policy does not automatically erase judgments entered under an earlier approach. Hellerstein characterized the government’s newer policy direction as a change in enforcement priorities rather than a significant change in law requiring the settlement to be vacated.

Injunction Survives, but CFTC Has Changed No-Deny Policy

The denial means the permanent injunction barring Gemini from making false or misleading statements to the CFTC remains part of the consent order. The agreement also contains a provision preventing Gemini from publicly denying its findings. Those provisions remain in the judicial order because the court refused to vacate them.

There is an important practical distinction, however. In June, the CFTC formally rescinded its longstanding policy requiring settling defendants not to deny enforcement findings and said it would not enforce existing no-deny provisions already entered in previous settlements. The Gemini clause therefore remains part of the court order even though the regulator has publicly stated that existing provisions of that type will not be enforced.

The decision leaves an unusual split between the agency and the judgment it once obtained. The CFTC now says the Gemini case should not have been brought, while the federal court has concluded that the regulator’s changed assessment does not supply sufficient legal grounds to undo the settlement. The result preserves the finality of the 2025 order even as the agency that secured it operates under a materially different enforcement philosophy.