Judge Alvin Hellerstein denied the joint motion the agency and the exchange filed in May, treating a change in enforcement policy as something short of a change in law. The $5 million penalty was already paid and will not be returned, and the permanent injunction on what Gemini tells the CFTC remains.
A federal judge has refused to cancel the consent order Gemini Trust Company signed with the Commodity Futures Trading Commission in January 2025, almost five months after the agency joined the exchange in asking him to undo it. U.S. District Judge Alvin Hellerstein denied the joint motion on Thursday in the Southern District of New York, according to reporting that read the court docket and a separate account citing Bloomberg Law.
The money was never the question. Gemini paid the $5 million civil penalty, and when the two sides filed their motion in May they agreed it would not be returned. What they asked the court to lift were the order's forward-looking terms, chiefly a permanent injunction barring Gemini from giving the CFTC false or misleading information. That injunction stays in place.
The unusual part of the case is who asked. In a press release dated May 27, the CFTC said it had reviewed the investigation's history, the evidence, the charging decision and its own litigation conduct, and had concluded that the complaint should not have been filed and would not be filed under current enforcement standards. The release lists six findings: that the complaint relied largely on a whistleblower whose credibility was seriously doubted, that the investigation pursued Gemini, which the release describes as a fraud victim, rather than the alleged fraudsters, that the evidence against the company was seriously questionable, that supporting material was withheld from a Commissioner during the vote to sue, that the agency's litigation counsel used privilege objections to block Gemini from obtaining evidence for its defense, and that personnel improperly used the CFTC's regulatory authority to gain settlement leverage. Enforcing the order's remaining provisions, the agency said, served neither its mission nor the public interest.
Those are the regulator's conclusions about its own case rather than a court's findings, and Hellerstein did not treat them as a reason to reopen a closed settlement. The order says "neither of these arguments provide sufficient grounds for relief," in the passage crypto.news quotes from it. The reasoning described in all three reports runs along one line: Gemini contested the suit for nearly three years and then settled roughly three weeks before its January 2025 trial date, so the agreement was voluntary, and material that surfaced afterward about how the investigation was run does not undo the company's acceptance of the terms. Crypto.news adds that the judge stated Gemini's senior officials knowingly misrepresented material information during the agency's review.
The motion relied on Rule 60(b) of the federal civil rules, which lets a court release a party from a final judgment where continued enforcement would be inequitable. The answer described in the reporting is that a shift in digital asset policy and a regulator's new enforcement standards are policy changes rather than changes in the law, and that regret about a bargain struck with the facts then available is not the changed circumstance the rule contemplates.
The underlying complaint, filed in June 2022, concerned what Gemini told the CFTC between July and December 2017 while the agency reviewed a proposed bitcoin futures contract, covering the exchange's trading platform and its bitcoin auction. The agency alleged the company described its platform as fully prefunded without disclosing that some customers could trade using loans or advances from people connected to it, and that it misrepresented controls meant to prevent self-trading. Gemini settled without admitting or denying the allegations.
One piece of the order has already been softened outside court. Cointelegraph reports that the settlement's bar on Gemini publicly denying the findings also survives the ruling, but that the CFTC said in June it would no longer enforce that clause. The injunction is different. The agency's decision not to enforce a term cannot remove it from a court's judgment, and the only route to lifting it was the motion the court has now denied.
For Gemini the distinction is practical. The company runs a CFTC-registered derivatives exchange, Gemini Titan, and in August it won exclusive rights to carry Apex brokerages' crypto event contracts through it. A standing injunction about the accuracy of what a company tells its derivatives regulator attaches to a continuing relationship, not only to the 2017 conduct at issue.
The ruling also lands while the CFTC is rebuilding the rules it enforces. Its advance notice on crypto market structure went out this month with comments open until December 14, and the question of whether event contracts are swaps is still splitting the appeals courts, with the agency itself saying only the Supreme Court can settle it. Thursday's order marks one limit on that reset. A regulator can stop enforcing a provision, and it can ask a court to erase one, but it cannot withdraw a judgment the court has entered.
Cointelegraph reports that the former CFTC chairman Timothy Massad called the attempt to reverse a settled case extraordinarily unusual and said the public deserves a better explanation. Neither Gemini nor the CFTC had commented on the ruling in the initial reports, and none of them records a decision on whether to appeal. Gemini separately filed a complaint with the CFTC's inspector general in June 2025 alleging misconduct by the agency's enforcement lawyers, which this ruling does not touch.
What stands after Thursday is the whole January 2025 record: findings Gemini never admitted, a penalty it cannot recover, and an injunction both the company and the regulator say should not exist.
