CFTC Seeks to Vacate $5M Settlement With Gemini

The US Commodity Futures Trading Commission has asked a federal court to vacate its $5 million settlement with crypto exchange Gemini, claiming the agency's enforcement action was based on flawed allegations.

Gemini settled with the CFTC and paid a $5 million fine in January 2025 in the final weeks of the Biden administration. The agency had accused it of making false or misleading statements related to a Bitcoin futures contract.

The CFTC filed a joint motion with Gemini in a Manhattan court on Wednesday seeking to vacate the settlement. It added in a statement that it had reviewed the matter and concluded that the complaint should not have been filed and would not have been under current enforcement standards.

The CFTC said the complaint brought under the Biden administration was largely based on a whistleblower’s account known to be lacking in credibility. Accordingly, the CFTC determined that continuing enforcement of the consent order’s prospective provisions serves neither the CFTC’s mission nor the public interest.

The CFTC’s request adds to a string of crypto lawsuits and investigations that the agency and the Securities and Exchange Commission have abandoned under US President Donald Trump. Gemini co-founders Tyler and Cameron Winklevoss each donated $1 million to Trump’s election campaign in 2024.

The motion comes after Trump’s former CFTC chair nominee, Brian Quintenz, in September shared on X messages from Gemini CEO Tyler Winklevoss, who asked if he would review the agency’s case against the company if he were made chair. Trump later withdrew Quintenz’s nomination and instead backed Mike Selig, a former lawyer for crypto companies who has taken a supportive stance toward the crypto industry.

The CFTC’s request seeks to end ongoing obligations imposed on Gemini under the settlement, including an injunction barring it from making false or misleading statements to the agency. Applying the remaining provisions, including injunctive relief, prospectively would not be equitable. Gemini has already paid the $5 million fine, but it was not clear if the agency would refund the penalty.

The case stemmed from allegations that Gemini made misleading statements in 2022 during the review of a Bitcoin futures contract, particularly regarding its auction volumes and liquidity. The CFTC said these claims were relevant to assessing risk and the contract’s approval.

The CFTC’s complaint relied on allegations from a whistleblower in 2017, who claimed that Gemini inflated trading activity and volumes to distort user demand. The agency argued in its latest filing that the whistleblower’s allegations were based on statements from Gemini’s former chief operating officer and a subordinate, who allegedly made threats against Cameron and Tyler Winklevoss, and was allegedly known to lie about material facts.

The CFTC also argued that Gemini was a victim of fraud, claiming that two customers exploited Gemini’s preferential fee structures through a coordinated rebate-fraud scheme. It also alleged that the two customers admitted defrauding Gemini of $7.5 million through this scheme, but the past leadership did nothing with those admissions.