Federal Judge Rejects Joint Gemini and CFTC Bid to Overturn $5 Million Settlement
Key Takeaways
- •U.S. District Judge Alvin Hellerstein denied a joint request from Gemini and the CFTC to overturn the exchange's $5 million settlement in a case overseen by the Southern District of New York.
- •The judge determined that the CFTC's change of position on the case was insufficient to undo the January 2025 settlement, which had been entered as a court order.
- •Hellerstein also rejected Gemini's argument that regulators had coerced it into settling weeks before trial, noting the exchange litigated the matter for about three years before settling.
- •The settlement's restrictions remain in effect, barring Gemini from misleading the CFTC and from publicly disputing the settlement's findings.
- •Gemini had already paid the $5 million and, earlier this year, announced plans to exit the U.K., the EU, and Australia while cutting 25% of its workforce to prioritize the U.S. market.
A U.S. federal judge on Thursday rejected an unusual joint request from crypto exchange Gemini and the Commodity Futures Trading Commission (CFTC) to overturn the exchange's $5 million settlement, even though the regulator said the case should never have been brought.
U.S. District Judge Alvin Hellerstein ruled that the CFTC's decision to reverse its position on the case was not enough to undo Gemini's January 2025 settlement, according to court documents filed in the U.S. District Court for the Southern District of New York. He also rejected the exchange's argument that it had been coerced into settling by regulators.
Gemini, founded by Cameron and Tyler Winklevoss, has already paid the $5 million, resolving the enforcement action weeks before the case was set to go to trial. Thursday's ruling — roughly 21 months after the settlement was finalized — means the court order and restrictions stemming from the 2025 agreement will remain in place: the exchange stays barred from misleading the CFTC and from publicly denying the settlement's findings.
A friendlier Washington, but no retroactive relief
The decision is significant because it shows that the friendlier approach to crypto regulation that has taken hold in Washington, D.C. is not retroactive. It does not automatically erase earlier court judgments, even when both the regulator and the company agree that a case should be withdrawn. Because the January 2025 agreement took the form of a court order, unwinding it required the judge's approval — a hurdle that remained even with the regulator and the exchange asking for the same outcome.
Joint requests to unwind finalized settlements are rare, and Thursday's ruling makes clear that a regulator's changed stance alone does not reopen a closed matter. Gemini can still operate in the U.S. and introduce new products, but it must live with the terms of the 2025 settlement as it shifts its business toward the American market.
Three years of litigation, then a settlement on the courthouse steps
The CFTC, the U.S. agency responsible for overseeing derivatives markets, 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 trial without admitting or denying the allegations.
“Gemini litigated the case for approximately three years, and then, despite the preceding facts, made the calculated decision settle the case shortly before trial,” Hellerstein wrote.
Gemini did not respond to a request for comment on Thursday's ruling.
Pivot to the U.S. market
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.
Source: CoinDesk
