Judge keeps Gemini’s $5 million CFTC order in force

A federal judge in Manhattan has rejected a joint request by the Commodity Futures Trading Commission and Gemini Trust to undo their $5 million consent order, leaving its injunction in force after the regulator said the case should not have been brought. Reuters’ report says Judge Alvin Hellerstein ruled on Thursday that the parties had not met the standard for setting the settlement aside.

The result preserves the January 2025 agreement even though both parties later sought relief. Gemini’s penalty had already been paid, and the parties said they were not seeking a refund. Their request focused on the order’s continuing provisions, including an injunction barring false or misleading statements to the CFTC.

Why did the CFTC join Gemini in challenging its own case?

The commission joined Gemini’s motion in May 2026 after reviewing its investigation, evidence, charging decision and litigation conduct. In its May 27 announcement, the CFTC said the complaint should not have been filed and would not have been brought under its current enforcement standards.

The agency listed several concerns, including reliance on a whistleblower it considered lacking in credibility, questions about the strength of the evidence, and material it said was withheld from a commissioner during the vote to sue. It also said litigation counsel had blocked Gemini from obtaining evidence and that personnel improperly used regulatory authority to gain settlement leverage. Those are the CFTC’s conclusions from its review; they are not findings in Hellerstein’s ruling.

The underlying case began in 2022. The CFTC alleged that Gemini made false or misleading statements during the agency’s review of a proposed bitcoin futures contract. The January 2025 consent order resolved that lawsuit and imposed the $5 million penalty and permanent injunction. The joint request therefore put the agency’s new assessment of its own enforcement process against the finality of a settlement Gemini had already accepted.

Why did the judge leave the consent order intact?

Hellerstein said the arguments did not justify reopening the judgment. In the court’s October 15 order, he treated the CFTC’s changed view and the parties’ later access to materials as insufficient grounds for relief: the relevant facts existed when the consent order was entered, so their later discovery did not amount to a significant change in circumstances.

The judge also rejected the claim that regulatory pressure made Gemini’s consent involuntary. As The Block reported from the ruling, Gemini had litigated the case for about three years and settled roughly three weeks before trial. The judge characterized the settlement as a calculated decision made with awareness of relevant issues, including a fraud scheme involving Gemini’s former chief operating officer.

That reasoning draws a line between a regulator changing its enforcement priorities and a court finding that an existing judgment has become inequitable. The CFTC argued that its current standards would have led it not to bring the complaint; Hellerstein’s ruling says that reassessment alone does not undo the parties’ earlier agreement. The order also leaves the penalty in place, though repayment was not part of the request.

What remains in force, and what should readers watch?

Gemini remains subject to the consent order’s injunction, and the $5 million penalty stays paid. The ruling did not erase the original allegations or establish the CFTC’s later criticisms as judicial findings. It kept the settlement’s terms in place despite the agency’s reversal in position.

The next signals are whether Gemini or the CFTC responds publicly or seeks further court review, and how the commission applies its stated enforcement standards in future digital-asset cases. For now, the practical outcome is narrower than the CFTC’s review suggested: the agency has disavowed the case, but the court has not lifted the order that resolved it.

Source material

• Reuters’ report — investing.com
• May 27 announcement — cftc.gov
• court’s October 15 order — storage.courtlistener.com