Judge refuses to undo Gemini's $5 million CFTC settlement

A federal judge refused to tear up Gemini's $5 million settlement with the US Commodity Futures Trading Commission, even though the regulator asked for its own case to be scrapped. The ruling came on October 15, 2026. The penalty stands.

Judge Alvin K. Hellerstein of the US District Court for the Southern District of New York denied a joint motion from Gemini Trust Company and the CFTC to vacate a consent order entered on January 6, 2025, according to the ruling, which The Block and Unchained both reported. Both sides had signed the request together. Hellerstein said no.

What the order keeps in place

Gemini's $5 million civil penalty does not change. The company paid it long ago, and both parties agreed it would not be refunded. An injunction stays live too. It bars Gemini from making false or misleading statements to the CFTC, and the firm must keep its promise not to publicly deny the agency's findings.

The dispute began in June 2022. The CFTC accused Gemini of giving its staff false or misleading information while they reviewed a proposed bitcoin futures contract, one that would have settled on an auction price pulled from Gemini's own platform. The exchange settled in December 2024, less than three weeks before trial. It did not admit or deny the claims.

Why the regulator turned on its own case

What makes this odd is who pushed for the reversal. In May 2026, the CFTC joined Gemini in a motion to vacate the order, a step it set out in a press release numbered 9236-26. The agency said it would not have filed the complaint under its current enforcement standards. This came as the CFTC has reworked its approach to crypto, the same shift behind its move to write a first US rulebook for crypto trading venues.

Its review listed specific problems. The case leaned on a whistleblower account the agency now calls "known to be lacking in credibility." Staff went after Gemini, which the CFTC described as a fraud victim, instead of the people accused of fraud. Evidence, the agency said, was even withheld from a commissioner during the vote to bring the complaint.

That shift did not come from nowhere. Unchained tied it to a January 2025 executive order on digital assets signed by President Donald Trump and a Justice Department memo titled "Ending Regulation by Prosecution." The enforcement mood in Washington has changed. The facts of the old case have not.

A ruling, not a redo

Hellerstein drew a clean line between policy and law. A change in enforcement priorities, he found, is not a change in the facts or the rules. "Newly acquired knowledge of facts that existed at the time the Consent Order was entered" does not count as a significant change, he wrote. He added that "the CFTC's present assessment that this action should not have been brought does not require vacatur or other relief."

He also rejected the claim that Gemini had been forced to settle. The company had lawyers. It fought the case for about three years before it, in his words, "made the calculated decision to settle the case shortly before trial." Hellerstein noted Gemini had known since August 2017 that its own chief operating officer and a subordinate helped run a fraud scheme against it. The order does not name them.

Asking a court to erase a settlement a firm has already signed and paid is a steep request. The judge held that a signed judgment belongs to the court, not to the two sides that struck the deal, so a later change of heart in Washington could not reach it. For a CFTC that has softened its stance on crypto, the order marks where that softer line runs out.

What to watch

Neither Gemini nor the CFTC has said publicly whether it will appeal. For now the consent order holds. Injunction and all.

The decision shows how hard it is to unwind a settlement a judge has approved, even when the accused and the accuser both want it gone. It also sets a marker for a regulator that has reframed much of its crypto work, from trading venues to its push to treat some prediction market contracts as swaps. Watch whether other firms that settled with US regulators try the same route, and whether judges give them the same answer.