A federal judge in the Southern District of New York has rejected a joint bid by crypto exchange Gemini (NASDAQ: GEMI) and the Commodity Futures Trading Commission (CFTC) to erase a permanent order barring the exchange from misleading the US regulator.

Judge Alvin Hellerstein declined to reopen the consent order — a settlement agreement approved and entered by the court as a binding order — which dates back to January 2025. The ruling was two-fold: Gemini was handed a $5 million civil penalty, and the exchange was permanently banned from making false or misleading statements to the CFTC.

The exchange already paid the full $5 million fine long ago, as noted in the May joint filing by Gemini and the CFTC. Whether the money would be returned had the court thrown out the order was never specified. The practical effect of vacatur would have fallen almost entirely on the injunction, with a favorable judgment wiping the standing judicial finding that the exchange misled its regulator from the record. Instead, that finding now stands even as the CFTC itself says the complaint should not have been filed.

Court finds no new facts

Gemini and the CFTC advanced two different arguments in asking the federal court to vacate the injunction. The CFTC argued that the 2022 complaint should never have been filed and that the current regime would not have brought it under its regulatory scope. Gemini, on the other hand, built its case around the claim that its settlement had been reached under coercive regulatory pressure.

Hellerstein knocked back both arguments. “Newly acquired knowledge of facts that existed at the time the Consent Order was entered does not constitute a significant change in factual circumstances,” he wrote in the judgment, adding that “the CFTC’s present assessment that this action should not have been brought does not require vacatur or other relief.”

The judge also rejected Gemini’s coercion claim, writing that the exchange “made the calculated decision to settle the case shortly before trial” after roughly three years of litigation. Hellerstein added that Gemini knew of its own internal problems, including a fraud scheme run by its former chief operating officer.

Gemini entered the settlement about three weeks before the case was scheduled to go to trial. At the time, it resolved a June 2022 lawsuit accusing the exchange of making false or misleading statements to the CFTC in 2017 about the risks of manipulation in a proposed Bitcoin (BTC) futures contract.

CFTC expands crypto oversight

Under the Trump administration, the CFTC has gained expanded regulatory oversight over the areas through which most of Gemini’s plans to become a “full-stack” marketplace run. Gemini President Cameron Winklevoss has said the company is looking at products spanning crypto spot, predictions, futures, options and perpetual contracts. The court order from the 2022 settlement, however, remains a spot on the exchange’s record as it seeks a complete suite of licenses from the CFTC.

Through affiliates, the exchange is already stacking the approvals to launch its new products and services. Gemini Titan became a Designated Contract Market (DCM) in December 2025 to launch a prediction market, while a separate affiliate, Gemini Olympus, received a Derivatives Clearing Organization license, which authorizes the clearing of derivatives trades, in May 2026. Both approvals were secured while the injunction remained in force.

A political path to the reversal

The joint motion, filed in late May, was itself the product of a turbulent year at the agency. In September 2025, then-nominee Brian Quintenz published texts he had exchanged with the Winklevoss twins, saying he released them because President Donald Trump “might have been misled.”

Quintenz claimed the brothers pressed him over the Gemini case — which Tyler Winklevoss called “lawfare trophy hunting” — and then pushed the White House to stall his confirmation. Trump withdrew Quintenz’s nomination and later installed Michael Selig as CFTC chair. Under Selig, the commission reversed course on Gemini.

In its May filing, the CFTC said it “concluded the complaint should not have been filed,” and the agency found its enforcement division had “resorted to inappropriate tactics.”

Selig remains the CFTC’s only sitting commissioner. This month, Cryptopolitan reported that the agency proposed its first crypto market rules after the CLARITY Act stalled in the Senate — rulemaking that could define oversight for the markets where Gemini’s full-stack expansion is concentrated.