The Commodity Futures Trading Commission and Gemini Trust Company filed a joint motion on May 27 in the U.S. District Court for the Southern District of New York, seeking to vacate parts of a 2025 consent order tied to a $5 million settlement. The filing marks a rare admission by the agency that its earlier enforcement action was built on shaky ground.
Joint Motion Targets Consent Order Terms
The motion challenges a January 2025 agreement in which Gemini resolved CFTC allegations of misleading statements in a Bitcoin futures product application without admitting wrongdoing. The exchange paid the $5 million civil penalty, but the regulator now argues the original complaint should never have been filed and wants to remove remaining prospective injunctions.
Evidence Chain Shows Cracks
During an internal review, the CFTC found that the June 2022 lawsuit heavily relied on a whistleblower account lacking credibility. The agency conceded that key evidence supporting the complaint showed serious weaknesses when re-examined. Additionally, requested evidence was withheld from a Commissioner before the enforcement vote, and litigation counsel blocked Gemini from accessing materials needed for its defense.
Enforcement Process Under Fire
The CFTC also claimed that personnel improperly used regulatory authority to increase settlement pressure on Gemini during the case. The motion explicitly states that continuing those injunctive obligations would not serve the public interest. This self-critique is unusual for a federal regulator.
Gemini Recast as Victim
In a twist, the CFTC characterized Gemini as a victim in a broader rebate-fraud scheme involving two customers who admitted defrauding the exchange of $7.5 million through coordinated activity. The agency said its reassessment comes after reviewing digital asset policy changes across multiple government branches.
Shifting Regulatory Winds
The motion arrives amid a pro-crypto shift under the Trump administration. Gemini co-founders Tyler and Cameron Winklevoss backed Trump's 2024 campaign, and current CFTC Chairman Mike Selig — a former crypto industry lawyer appointed by Trump — now leads the agency. These factors may have expedited the enforcement reconsideration.