Judge Rejects Gemini-CFTC Bid to Lift Settlement Restrictions

U.S. District Judge Alvin K. Hellerstein on Oct. 15 rejected Gemini and the Commodity Futures Trading Commission's joint request to undo their January 2025 settlement, leaving the crypto exchange's continuing court-ordered restrictions in place.

The opinion, filed in the Southern District of New York in *CFTC v. Gemini Trust Company*, No. 1:22-cv-04563, preserves a permanent injunction against making false or misleading statements or omitting material facts to the CFTC. Gemini also remains bound by an agreement not to publicly deny the complaint's allegations or the settlement's findings.

Gemini has already paid the $5 million civil penalty imposed under the Jan. 6, 2025, consent order, Hellerstein wrote. The parties had agreed that the money would not be returned to Gemini.

In their May 28 amended motion, the parties sought to vacate the consent order under Federal Rule of Civil Procedure 60(b)(5), or alternatively lift its prospective provisions under Rule 60(b)(6). The CFTC said a review had exposed evidentiary weaknesses and inappropriate enforcement tactics, and that the complaint should not have been filed under its current standards.

Enforcement Shift Falls Short

Hellerstein ruled that the agency's revised approach, including policies following President Donald Trump's digital-assets executive order, represented a change in enforcement priorities rather than a significant change in law sufficient to reopen the judgment.

He also found that the internal materials obtained after settlement concerned facts that already existed when Gemini agreed to settle. Later knowledge of those facts did not establish changed circumstances, and the parties had not shown how the later disclosure prejudiced them, he wrote.

The judge rejected relief under Rule 60(b)(6) as well. Claims involving newly discovered evidence or misconduct belong under other provisions carrying a one-year deadline, he said; the catchall provision could not be used to bypass that limit. He also rejected the argument that regulatory pressure rendered Gemini's settlement involuntary, noting that it had counsel and expressly agreed to settle voluntarily.

The original consent order concerned statements and omissions from roughly July through December 2017 during the CFTC's review of a proposed Bitcoin futures contract. The contract would settle against a price determined by Gemini's auction, making the auction's susceptibility to manipulation relevant to the regulator's review.

The settlement found misleading statements or omissions concerning trading prefunding, self-trading safeguards, fee rebates and trading volume. Gemini entered the settlement without admitting or denying the allegations or findings, except as to jurisdiction and venue.

Hellerstein directed the clerk to terminate the two motions. He also noted that the CFTC remains free to account for its current policies when deciding whether to seek enforcement of the consent order.