Judge refuses to undo Gemini’s $5M CFTC settlement, even with the regulator on Gemini’s side

A federal judge in New York has refused to cancel the Gemini CFTC settlement, even though both sides asked him to. In an 8-page order filed on 15 October 2026, US District Judge Alvin K. Hellerstein denied the joint request by the Commodity Futures Trading Commission and Gemini Trust Company to vacate the January 2025 consent order that cost the exchange a $5 million civil penalty and put it under a permanent injunction. The ruling, entered as ECF No. 223 in CFTC v. Gemini Trust Company (case 1:22-cv-04563-AKH), leaves the judgment in place.

The core of the ruling is short. A new administration that no longer likes an old case has changed its enforcement priorities, the judge wrote, not the law. And Gemini chose to settle less than three weeks before trial, with lawyers at its side.

The order marks a limit to the Trump administration’s retreat from crypto enforcement. Regulators in Washington have dropped pending cases one after another since early 2025. A judgment already entered by a court is a different matter: the agency can decide not to enforce it, but only a judge can erase it, and this one declined.

No statement from Gemini, its founders Tyler and Cameron Winklevoss, or the CFTC on the ruling had been published by 08:40 UTC on 16 October. The Block, which reported the decision overnight, said it had asked Gemini and the CFTC for comment; Cointelegraph also carried no reaction from either side.

Gemini CFTC settlement: what Judge Hellerstein decided

The order denies two filings, both submitted by Gemini lawyer Avi Perry according to the court docket: the joint motion (ECF 215), filed on 27 May 2026, and an amended version (ECF 219), filed the next day. The clerk was told to terminate both.

The parties had asked for one of two things. Their first choice was to vacate the whole consent order under Rule 60(b)(5) of the Federal Rules of Civil Procedure, which allows relief when applying a judgment going forward is no longer equitable. Failing that, they wanted the forward-looking parts of the order, mainly the injunction, lifted under Rule 60(b)(6), the catch-all for extraordinary circumstances.

Their case rested on two arguments, as the judge sums them up. The first was policy: the CFTC’s current approach, driven in part by Executive Order 14178 on digital assets, signed on 23 January 2025, means the agency would not bring this complaint today. The second was conduct. After the settlement, the CFTC reviewed internal material and concluded that its Division of Enforcement had used inappropriate tactics, including reliance on a questionable whistleblower, regulatory pressure and the use of deliberative process privilege to stop evidence from coming out.

“Neither of these arguments provides sufficient grounds for relief under Rule 60(b)(5) or 60(b)(6).” (Judge Alvin K. Hellerstein, order of 15 October 2026, p. 5)

Before getting to the merits, the judge made a point that will matter beyond this case. A regulator and a defendant agreeing with each other does not settle the question for the court. “The parties’ agreement that relief is warranted does not itself establish that relief is warranted under Rule 60(b),” he wrote.

Six reasons the court gave for keeping the judgment

Old facts are not new facts

Rule 60(b)(5) covers a significant change in circumstances after a judgment. The judge found that what the parties described was not that. Their material goes to the merits of the original case: the misrepresentations of Gemini, the Winklevoss brothers and the whistleblower, and the Commission’s internal deliberations. “Newly acquired knowledge of facts that existed at the time the Consent Order was entered does not constitute a significant change in factual circumstances,” the order says.

He added that Gemini had not shown how the late disclosure of internal documents hurt it. Its complaints about the CFTC’s conduct, he noted, “were made and rejected in the pretrial phase”. Hellerstein also recalled how he had handled discovery back then. Gemini could question CFTC witnesses and obtain documents tied to their testimony, but not the agency’s internal account of what it had learned from them.

Gemini knew the weak points when it signed

Citing Gemini’s own filings, the order says the company knew as early as August 2017 that it had been the victim of a fraud scheme enabled by its own chief operating officer and a subordinate. It also knew that the COO had threatened to interfere with the CFTC review. It settled anyway. The judge added a sentence of his own that Gemini will not like: “Gemini’s highest officials willingly misrepresented material facts.” “Gemini’s receipt of additional materials after the fact may have caused it to regret that it settled,” the judge wrote, which is not a ground to reopen the case.

A change of priorities is not a change in the law

The parties pointed to Executive Order 14178, the Deputy Attorney General’s memo titled “Ending Regulation by Prosecution” and the CFTC’s new enforcement approach. The judge said these “collectively constitute a change in enforcement priorities and policies, not a ‘significant change … in law.'” The standard comes from the Supreme Court’s 1992 decision in Rufo v. Inmates of Suffolk County Jail. He also cited Benjamin v. Malcolm, a 1994 Southern District of New York case in which a court refused to modify a consent decree because the “new administration simply disagreed with the old administration’s view of the merits”.

The catch-all cannot dodge the one-year deadline

Claims of new evidence or of misconduct by the other side belong under Rules 60(b)(2) and 60(b)(3), which must be raised within a year of the judgment. The consent order was entered on 6 January 2025, so that window closed in January 2026. The motion came in late May 2026. Relying on the Supreme Court’s 2025 ruling in BLOM Bank SAL v. Honickman, the judge held that Rule 60(b)(6) cannot be used to get around those time limits.

Pressure to settle did not make the consent involuntary

Both parties now argue that regulatory pressure on Gemini was so heavy that its consent was not really voluntary. The judge was not persuaded that this made Gemini’s agreement involuntary. The company had lawyers, fought the case “vigorously for over three years”, and stated in paragraph 2 of the consent order that it agreed voluntarily and without threats.

“Gemini litigated the case for approximately three years, and then … made the calculated decision to settle the case shortly before trial,” the order reads. The judge leaned on Ackermann v. United States (1950), where the Supreme Court refused to relieve a party from the consequences of a “free, calculated, [and] deliberate choice”.

The CFTC can simply choose not to enforce

Last, the agency’s view that the case should never have been brought does not require the court to erase the judgment. “The CFTC retains discretion over its enforcement priorities and remains free to account for its current policies in deciding whether to seek enforcement of the Consent Order,” Hellerstein wrote, citing Heckler v. Chaney (1985). Put plainly, the regulator is free to look away, but the judgment stays on the books.

What the 2025 consent order says about Gemini’s 2017 statements

The case was never about whether bitcoin futures should exist. The judge stresses that it concerned misrepresentation: what Gemini told CFTC staff in the Division of Market Oversight in 2017, while the agency reviewed a bitcoin futures contract that was to settle on a price from Gemini’s own auction.

According to the summary in the order, the consent order covered misleading statements or omissions on four subjects:

• Funding. Gemini said its exchange was “fully (pre-)funded”, while some customers traded with loans from a Gemini affiliate and with “advances” or “credits” from an employee.
• Self-trading. Gemini said self-trading was prevented or prohibited, but it had no safeguard before about May 2017, and some self-trading continued after that.
• Rebates. Market-maker rebates were described as uniform and public, while bespoke fee deals allowed two customers to trade fraudulently or collusively. The two employees responsible were suspended, then fired.
• Volume data. Gemini submitted historical trading volumes without saying that part of them came from the activity above.

The violation was Section 6(c)(2) of the Commodity Exchange Act, which bans knowingly or recklessly making false or misleading material statements to the Commission. Gemini paid a $5 million civil monetary penalty and accepted a permanent injunction against making false or misleading statements or omissions to the CFTC. It neither admitted nor denied the allegations, but agreed not to deny them publicly.

Why did a single auction price matter so much? A US futures exchange can list a new contract by self-certifying that it meets CFTC rules, including the core principle that a contract must not be “readily susceptible to manipulation”. When the settlement price comes from one venue’s auction, what that venue says about its own market becomes part of the regulator’s check.

From a 2022 lawsuit to a 2026 joint motion

More than four years separate the lawsuit from this ruling, and the two sides switched positions along the way.

In June 2025, months after settling, Gemini filed a 13-page complaint with the CFTC’s inspector general, Christopher Skinner. It accused the agency’s enforcement staff of a seven-year campaign and said the case grew out of a “lie-riddled whistleblower submission by a discredited former employee”, Decrypt reported on 18 June 2025. Gemini also said the whistleblower could still receive a $1.5 million award. Whether that award was paid is not public.

Gemini went public in September 2025. Its parent, Gemini Space Station, priced its initial public offering on 11 September at $28 a share, raising about $425 million, and started trading on Nasdaq under the ticker GEMI the next day, according to Nasdaq.

The dispute also hung over the fight for the CFTC’s top job. In September 2025 Brian Quintenz, then the nominee for chair, posted texts from Tyler Winklevoss asking how he would “align with President Trump” on ending “lawfare”. Quintenz wrote that they showed “what I refused to promise”, Banking Dive reported. The White House withdrew his nomination that month, according to Decrypt. Michael Selig became chair in December 2025, and in late May 2026 he was still the agency’s sole commissioner, The Block reported.

Then came the about-turn. On 27 May 2026 the CFTC published release No. 9236-26 announcing it had joined Gemini’s motion. After a review, the agency concluded the complaint “should not have been filed” and would not be filed under current standards. It said the case rested largely on a whistleblower known to lack credibility, that evidence a commissioner asked for was withheld before the vote to sue, and that staff used the agency’s regulatory authority to gain settlement leverage. Continued enforcement, it said, “serves neither the CFTC’s mission nor the public interest”. Both sides agreed the $5 million would not be returned.

One part of the order already has little bite. The consent order bars Gemini from publicly denying the allegations, but the CFTC said in June that it would no longer enforce such restrictions, Cointelegraph noted on 16 October.

Not everyone in the field approved of the joint request. Timothy Massad, a former CFTC chair, called it “extraordinarily unusual” and said the public “deserves a better explanation”, in comments quoted by Cointelegraph.

Why the ruling matters for crypto enforcement in the US

The ruling lands while the CFTC is shrinking. The agency brought nearly 80% fewer enforcement actions in 2025 than its ten-year average, and its staff stood 21% below the ten-year average at the end of 2025, NPR reported on 8 October 2026. It has rolled back actions involving Gemini, Celsius and FTX. The Government Accountability Office is due to start reviewing the CFTC’s workforce cuts in December, after a request from Senator Elizabeth Warren.

Chair Selig put the policy in one sentence in August 2026: “The era of political lawfare, debanking and regulation by enforcement is over,” as quoted by NPR. The Securities and Exchange Commission had moved first. It announced the dismissal of its Coinbase case on 27 February 2025, and Kraken said in early March 2025 that the SEC had agreed to drop its suit too, Banking Dive reported.

Dropping a pending lawsuit is easy: the agency withdraws it. Undoing a judgment is not. Hellerstein’s order shows where the line sits. A consent order is a court judgment, so a policy shift at the agency does not by itself give the court a reason to reopen it, and the one-year deadline for new-evidence claims still applies. Other companies hoping to unwind settled crypto cases from the Biden years now face a written ruling against that route, at least in this court.

While its enforcement arm gets smaller, the agency is also writing new rules. Our coverage of the CFTC consultation on federal rules for retail crypto trading and our explainer on how the SEC and CFTC are writing US crypto rules without the CLARITY Act give the wider picture.

What the injunction means for Gemini and its customers

In day-to-day terms, the injunction bars Gemini from making false or misleading statements to the CFTC. Any registered firm must avoid that anyway. The difference is that a breach could now be pursued as contempt of court, on top of an ordinary enforcement case.

That weighs more for Gemini than it did in 2017. The company now holds CFTC licences: Gemini Titan, approved as a designated contract market, launched a prediction market in December 2025, and Gemini Olympus received a derivatives clearing organization licence in May 2026, Decrypt reported. CoinGape called the settlement a “compliance overhang” as Gemini pushes further into CFTC-regulated prediction markets.

For people who trade on the exchange, nothing changes: the ruling concerns what Gemini told a regulator in 2017, not customer funds or current operations. Our Gemini review covers its licences, fees and security record. In the European Union, Gemini serves users under a MiCA licence granted by Malta’s financial regulator in August 2025. The US ruling has no direct effect there, and there is no sign of any EU action. Our guide to the MiCA regulation explains how that licence works across member states.

Consent orders and Rule 60(b), in plain terms

A consent order is a settlement that a court signs and turns into a judgment. The defendant usually neither admits nor denies the charges, pays a penalty and accepts limits on future conduct. Because it is a judgment, the parties cannot cancel it between themselves.

Rule 60(b) is the narrow door for reopening a final federal judgment. Its sub-sections cover specific grounds, such as new evidence or fraud by the other side, which must be raised within one year. Rule 60(b)(5) applies when facts or law have changed so much that enforcing a judgment going forward would be unfair. Rule 60(b)(6) is reserved for extraordinary cases that fit nowhere else. Courts read all of them strictly, because judgments are meant to be final.

Appeal window and next steps

No appeal had been filed by the morning of 16 October. A denial of Rule 60(b) relief can be appealed to the Second Circuit. As a general rule, the deadline in a civil case where a US agency is a party is 60 days after the order, which would point to mid-December 2026. Whether Gemini or the CFTC will try is unknown.

Gemini and the Winklevoss twins have been vocal about the case since 2025, so their first comment on the ruling will show whether they plan to fight on. The other open question is whether the CFTC will formally say it will not enforce the injunction, the option the judge pointed to. Separately, the GAO is due to start its review of CFTC staffing in December.