Judge dismisses the request of CFTC and Gemini to revoke a $5 million settlement agreement

A U.S. federal judge rejected a request jointly filed by the cryptocurrency exchange Gemini and the Commodity Futures Trading Commission (CFTC) of the United States. Although regulatory authorities determined that, according to current enforcement standards, they would not have proceeded with this case, the court still refused to overturn the $5 million settlement agreement.

On Thursday, Judge Alvin Hellerstein in the U.S. region ruled that changes in the enforcement focus of CFTC and allegations of improper conduct by its law enforcement agencies were not sufficient grounds to overturn the settlement agreement reached in January 2025.

On May 27th, CFTC and Gemini jointly requested the court to revoke the settlement agreement. Prior to this, an internal review by regulatory authorities revealed that their enforcement departments were involved in suspected improper conduct, including relying on a questionable informant, exerting undue regulatory pressure, and attempting to prevent the disclosure of evidence.

This ruling means that the permanent ban on Gemini from making false or misleading statements to CFTC remains in effect. The settlement agreement also prohibits Gemini from publicly denying these findings, however, in June, the regulatory authorities stated that they would no longer enforce such restrictions.

Gemini has paid a fine of 5 million US dollars. CFTC previously informed Cointelegraph that even if the settlement agreement is overturned, this fine will not be refunded.

The judge stated that Gemini decided to reach a settlement on their own before the trial.

The core of this case lies in how Gemini operates its Bitcoin auctions. According to the consent order from January 2025, this exchange failed to disclose that some customers used borrowed funds for trading, self-trading occurred despite protective measures in place, and certain traders received special fee arrangements.

Gemini also submitted trading volume data, but did not disclose that some of the trading activities involved the aforementioned practices.

Hellerstein indicates that Gemini was aware of the issues present in the CFTC case at the time of agreeing to the settlement; less than three weeks remained until the trial was to begin. The judge noted that although the exchange later obtained more CFTC internal documents, this new information was still not sufficient to overturn the settlement agreement that Gemini had voluntarily accepted.

The judge also dismissed another claim that President Donald Trump's executive order on digital assets and the new enforcement methods of regulatory agencies were sufficient to constitute grounds for relief. The judge stated that these changes reflected policy adjustments, rather than any significant changes in the law.

The chairman, Timothy Massad, previously referred to the regulatory authorities' attempt to overturn a settled case as "extremely unusual" and stated to Cointelegraph that the public "deserves a better explanation."