A U.S. federal judge has rejected an unusual, joint request by cryptocurrency exchange Gemini Trust and the Commodity Futures Trading Commission (CFTC) to cancel their $5 million settlement agreement. According to reports from CoinDesk, U.S. District Judge Alvin Hellerstein ruled that neither the regulator's allegations of improper enforcement conduct nor changes in federal cryptocurrency policy justified overturning the January 2025 agreement. The judge stated that 'neither of these arguments provide sufficient grounds for relief,' referring to alleged problems with the original enforcement process and changes in the administration's approach to cryptocurrency regulation. In his Thursday ruling, Judge Hellerstein pointed out that Gemini signed off on the settlement three weeks ahead of trial, emphasizing that the exchange had consented to the agreement before legal proceedings began. The decision is significant because it shows that a friendlier approach to crypto regulation in Washington D.C. is not retroactive - it does not automatically erase earlier court judgments, even though the regulator and the company agree they should be withdrawn.
The original enforcement action began in June 2022 when the CFTC accused Gemini of providing false or misleading information during a regulatory review of a proposed Bitcoin futures contract. As reported by CoinDesk, between July and December 2017, Gemini had supplied information about its trading platform and Bitcoin auction system, with the proposed futures contract relying on auction prices generated by the exchange. The CFTC alleged that Gemini made misleading statements concerning trading volume, customer funding arrangements, and safeguards against manipulation. Following years of litigation, the parties reached a settlement in January 2025, with Gemini agreeing to pay a $5 million civil monetary penalty and comply with a permanent injunction against providing false or misleading information to the commission. Gemini completed the payment and agreed to the injunction as part of the resolution process. The ruling also keeps the exchange under a court order prohibiting it from misleading the CFTC or publicly denying the settlement's findings.
The attempt to overturn the settlement began in May 2026 when the CFTC joined Gemini in seeking relief from the court order. According to reports from CoinDesk, following an internal review, the regulator announced on May 27 that its original complaint should not have been filed. The CFTC questioned the reliability of the whistleblower whose account supported much of the investigation and alleged that enforcement staff had improperly used their regulatory authority to strengthen their position during settlement discussions. The agency maintained that the practices identified in its review did not meet acceptable enforcement standards. The CFTC argued that the matter would not have proceeded while President Donald Trump was in office, who has presented himself as more crypto-friendly than his predecessor. Judge Hellerstein noted that '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 settlement overturn attempt gained political significance due to the involvement of the Winklevoss twins, who are prominent supporters of Trump and helped derail the confirmation of Trump's initial CFTC pick, Brian Quintenz. According to Bloomberg News, Tyler Winklevoss helped derail Quintenz's confirmation, with the nominee posting on social media that the president "might have been misled" by the Gemini founders and attaching screenshots of direct-message exchanges. Trump later selected Michael Selig, a lawyer known for his work in crypto, to lead the commission. With the court keeping the settlement and its injunction in force, the compliance guardrails around Gemini remain firmly in place. The ruling comes as regulators have pivoted on digital-asset enforcement, with the president pledging to make the US the "crypto capital" of the world. Despite the settlement, Gemini can still operate in the U.S. and introduce new products, but the ruling means it must live with the terms of its 2025 settlement as it shifts its business toward the American market.
