The U.S. Commodity Futures Trading Commission has moved to scrap its $5 million settlement with crypto exchange Gemini after concluding that the enforcement case should not have been filed under the agency’s current standards.
Summary
- The CFTC has asked a federal court to vacate its $5 million settlement with Gemini after concluding the case should not have been filed.
- Regulators said the original complaint relied heavily on a whistleblower account that lacked credibility.
- Gemini had settled the case in January 2025 over allegations tied to statements made during the approval process for a Bitcoin futures contract.
In a joint motion filed Wednesday in a Manhattan federal court, the CFTC and Gemini asked the court to vacate the January 2025 consent order that resolved allegations tied to Gemini’s proposed Bitcoin futures contract.
The regulator said it had reviewed the matter and determined that continuing enforcement of the settlement’s remaining provisions would not serve the public interest.
As previously reported by crypto.news, Gemini agreed to pay a $5 million civil penalty to settle claims that it provided misleading information to the agency while seeking approval for what was set to become the first regulated Bitcoin futures contract in the U.S. The company settled the matter without admitting or denying wrongdoing.
According to the CFTC’s latest filing, the original complaint was “largely based on a whistleblower’s account known to be lacking in credibility.” The agency also said the lawsuit “would not have been” brought under its current enforcement approach.
The allegations were first raised in 2022, when the CFTC accused Gemini of making false or misleading statements between July and December 2017 during the self-certification process for its Bitcoin futures product. Regulators at the time argued that details tied to auction volume and market liquidity were material to evaluating the risks associated with the contract.
Gemini denied the accusations throughout the case, maintaining that there had been no manipulation of Bitcoin prices or harm to investors.
Inside the agency’s revised position
In its latest court filing, the CFTC argued that the whistleblower allegations relied on statements from Gemini’s former chief operating officer and another subordinate who allegedly threatened Cameron and Tyler Winklevoss and was “known to lie about material facts.”
At the same time, the regulator claimed Gemini itself had been harmed through a coordinated rebate fraud scheme involving two customers who allegedly exploited the exchange’s preferential fee structure.
According to the CFTC, the two customers admitted to defrauding Gemini of roughly $7.5 million, though the agency said prior leadership “did nothing” with those admissions.
The regulator is now seeking to remove ongoing obligations imposed under the settlement, including an injunction that bars Gemini from making false or misleading statements to the agency in the future.
“Applying the remaining provisions, including injunctive relief, prospectively would not be equitable,” the CFTC said in its statement.
Although Gemini has already paid the $5 million penalty tied to the January settlement, the agency did not indicate whether the company would receive a refund if the court approves the request.
Elsewhere in Washington, the filing adds to a growing list of crypto-related enforcement actions that federal regulators have abandoned or reconsidered since President Donald Trump returned to office.
Gemini’s founders, Tyler and Cameron Winklevoss, each donated $1 million to Trump’s 2024 presidential campaign.
Months before the latest filing, former CFTC chair nominee Brian Quintenz shared messages on X from Gemini CEO Tyler Winklevoss, who had asked whether Quintenz would review the agency’s case against the company if he became chair.
Trump later withdrew Quintenz’s nomination and backed Mike Selig, a former lawyer who has represented crypto firms and publicly supported the digital asset industry.
Apart from the CFTC matter, Gemini has also faced scrutiny from the U.S. Securities and Exchange Commission over its Earn product.
