A federal judge has denied an unusual joint motion from Gemini and the Commodity Futures Trading Commission (CFTC) to vacate the $5 million settlement that the Winklevoss twins' crypto exchange agreed to in January 2025, leaving the settlement fully intact. The Oct. 15 ruling keeps in place a permanent injunction barring the exchange from making false statements to the regulator, and the $5 million Gemini has already paid will not be refunded. It is a rare instance of a court holding firm as a regulator retreats from its own case, and it lands amid the CFTC's broader pro-crypto shift.

In the ruling, U.S. District Judge Alvin Hellerstein of the Southern District of New York rejected the exchange and the regulator's unusual joint request to throw out the consent order. Hellerstein found that neither a shift in the CFTC's enforcement priorities under the current administration nor allegations of misconduct inside the agency's enforcement division met the legal bar required to reopen a signed judgment. The judge noted in the court document that Gemini voluntarily signed the settlement roughly three weeks before trial.

"Neither of these two grounds is sufficient to support vacating the settlement," Hellerstein wrote.

From 2022 charges to a joint bid to walk away

The dispute dates to 2022, when the CFTC charged Gemini with providing material false or misleading statements to the agency in connection with a proposed Bitcoin futures product. The two sides reached the $5 million settlement in early 2025, then stunned observers in May by jointly moving to undo it, arguing that the original enforcement effort had violated principles of fair enforcement.

Hellerstein was not persuaded by that argument. Consent orders of this kind take effect as binding court judgments rather than informal agreements, which is why erasing one demands clearing a high legal threshold—the same bar the judge found unmet here.

The ruling leaves intact a permanent injunction barring Gemini from making false or misleading statements to the CFTC, as well as from publicly denying the settlement's findings—though the agency has said it would no longer enforce that gag-style provision. Because Gemini has already paid the $5 million penalty, and the parties previously said it would not be refunded even if the motion succeeded, the money stays with the government. The upshot is that the case's findings and restrictions remain on the record even though both the regulator and the company wanted them gone.

A regulator changing course

The decision leaves a compliance overhang on Gemini just as the exchange expands its CFTC-regulated business. The exchange recently won approval from the Mike Selig-led CFTC to broaden its prediction-market and perpetual-futures offerings. The permanent injunction applies to the exchange as it pursues that growth, meaning the newest additions to its CFTC-regulated lineup now sit alongside an enforcement order both sides had asked the court to erase.

The episode also underscores how dramatically the CFTC's posture toward crypto has shifted. The agency has in recent months moved aggressively to accommodate the industry, issuing no-action relief letting crypto apps offer regulated derivatives and floating a plan to bring crypto exchanges under federal oversight—a softer stance that, in this case, ran headfirst into a judge unwilling to rewrite a closed and signed deal. How the agency's proposed oversight framework takes shape, and where exchanges operating under existing enforcement orders fit within it, remains an open question coming out of the case.