U.S. Judge Rejects Gemini's Bid to Void $5 Million CFTC Settlement Despite Regulator's Support
Key Takeaways
- •Federal Judge Alvin Hellerstein of the Southern District of New York denied a joint request from Gemini and the CFTC to overturn the exchange's $5 million settlement.
- •The court ruled that the CFTC's decision to reverse its position in the case did not undo the January 2025 settlement, and it rejected Gemini's argument that it had been coerced into settling.
- •The CFTC sued Gemini in 2023 over allegations that the exchange misled regulators during a 2017 review of a proposed bitcoin futures contract, and Gemini settled three weeks before trial without admitting or denying the allegations.
- •The ruling leaves in place a court order barring Gemini from misleading the CFTC or publicly denying the settlement's findings, although the company remains free to operate in the U.S. and launch new products.
- •The decision demonstrates that Washington's friendlier approach to crypto regulation does not apply retroactively, as Gemini shifts its business toward the U.S. market after announcing exits from the U.K., the European Union and Australia and a 25% workforce reduction.
A U.S. federal judge has rejected an unusual joint request from crypto exchange Gemini and the Commodity Futures Trading Commission (CFTC), the federal agency that oversees U.S. derivatives markets, including bitcoin futures, to overturn a $5 million settlement, even though the regulator said the case should never have been brought.
Federal Judge Alvin Hellerstein of the U.S. District Court for the Southern District of New York ruled on Thursday that the CFTC's decision to reverse its position in the case was not enough to undo the settlement Gemini reached in January 2025. The court also rejected Gemini's argument that it had been coerced into settling by regulators.
Gemini, the exchange founded by Cameron and Tyler Winklevoss, has already paid the $5 million. The ruling leaves in place a court order prohibiting the company from misleading the CFTC or publicly denying the settlement's findings.
The decision carries broader significance: it demonstrates that Washington D.C.'s friendlier approach to crypto regulation does not apply retroactively. A shift in regulatory posture does not automatically erase earlier court judgments, even when the regulator and the company agree that a case should be withdrawn.
Gemini remains free to operate in the U.S. and introduce new products, but it must now live with the terms of its 2025 settlement as it shifts its business toward the American market.
The CFTC sued Gemini in 2023, alleging that the exchange misled regulators during a 2017 review of a proposed bitcoin futures contract. Gemini settled three weeks before the trial without admitting or denying the allegations — a structure commonly used to resolve U.S. regulatory cases — and it had not responded to a request for comment on the ruling.
“Gemini litigated the case for approximately three years, and then, despite the preceding facts, made the calculated decision to settle the case shortly before trial,” the judge wrote.
Earlier this year, Gemini announced plans to exit the U.K., the European Union and Australia, and to cut 25% of its workforce as it redirected resources toward the U.S. market and prediction markets. The company said it would continue operating in Singapore.
