Judge Hellerstein Keeps Gemini's $5 Million CFTC Settlement in Place

Update 04:32 UTC: The ruling, entered October 15 in case 1:22-cv-04563-AKH, adds detail on the internal review that drove the CFTC's reversal: the agency concluded after its own reexamination of the evidence, the charging decision and the conduct of the litigation that the case should never have been filed, citing…

Settlement Stays Intact

US District Judge Alvin Hellerstein has refused to erase the permanent order that bars crypto exchange Gemini from misleading the Commodity Futures Trading Commission (CFTC), keeping the company's $5 million settlement fully in place. The ruling, issued Thursday in the Southern District of New York, denied the joint request Gemini and the regulator filed together in late May to vacate the January 2025 consent order. Gemini, founded by Cameron and Tyler Winklevoss and listed on Nasdaq as GEMI, has already paid the full $5 million civil penalty, so vacatur was never about the money: it would have wiped the judicial finding that the exchange misled its regulator off the record entirely. The decision also keeps a second restriction alive, one that bars Gemini from publicly denying the settlement's findings, although the CFTC said in June it would no longer enforce that clause. For a company restructuring its whole business around the US market, the order now stands as a lasting mark on its record that it cannot negotiate away.

The case traces back to a 2017 review of a proposed Bitcoin futures contract, in which the CFTC accused Gemini of making false or misleading statements about manipulation risks. Per the January 2025 consent order, the exchange failed to disclose that some customers traded with borrowed funds, that self-trading occurred despite safeguards, and that certain traders received special fee arrangements; Gemini also submitted trading volume data without flagging those practices. Hellerstein dismantled both arguments for relief. He wrote that “newly acquired knowledge of facts that existed at the time the Consent Order was entered does not constitute a significant change in factual circumstances,” and he rejected the coercion claim outright, finding that Gemini “made the calculated decision to settle the case shortly before trial” after roughly three years of litigation. The settlement landed about three weeks before the trial was set to begin. The judge added that the exchange knew of its own internal problems, including a fraud scheme run by its former chief operating officer, and he held that President Trump's digital asset executive order and the CFTC's friendlier enforcement posture reflect policy shifts, not a significant change in law.

The ruling also clarified what the paid penalty means going forward. Under the joint motion, filed May 27 in case 1:22-cv-04563-AKH, the parties invoked Rule 60(b)(5) and, in the alternative, Rule 60(b)(6), targeting the continuing provisions rather than the money: the CFTC's May announcement explicitly ruled out returning the $5 million even if the order were vacated. Hellerstein's answer drew on the docket's history, including his November 2024 denial of the regulator's partial summary judgment motion, which left contested elements unresolved and framed the settlement as a deliberate choice to avoid trial. He also separated dates, finding that facts known before judgment, including the alleged enforcement tactics, count as preexisting, not newly changed circumstances. Any change to the order now requires an appeal or a new docketed ruling.

Beyond the denial itself, the settlement's terms carry a detail that now binds the exchange: Gemini entered the January 2025 deal without admitting or denying the allegations, so vacatur would have been its only route to disputing them on the merits. The exchange argued that mounting legal fees and the looming trial forced its hand, and it even agreed in the joint motion to let the government keep the $5 million penalty if the order were erased. That concession made no difference to the court. The CFTC had sued in June 2022, and Hellerstein found that most of the concerns cited in the agency's internal review predated the agreement. The judge also rejected the argument that a new administration's enforcement priorities could unwind a binding court order, and the ruling leaves the CFTC free to exercise its own discretion over future enforcement.

The ruling, entered October 15 in case 1:22-cv-04563-AKH, adds detail on the internal review that drove the CFTC's reversal: the agency concluded after its own reexamination of the evidence, the charging decision and the conduct of the litigation that the case should never have been filed, citing doubts about the whistleblower's reliability and the sufficiency of the evidence against Gemini, along with problems in how evidence was shared within the commission and how the defense obtained materials needed to prepare. The underlying futures product at issue settled against the Bitcoin spot auction price on Gemini's own platform, a structure the regulator said made the accuracy of the exchange's statements about manipulation risks central to its 2022 complaint. Hellerstein nonetheless treated those findings as circumstances that existed at the time of the settlement, leaving the permanent injunction standing.

A Regulator That Changed Its Mind

What makes the denial unusual is that the agency itself asked for it. The joint motion filed on May 27 followed an internal CFTC review that surfaced alleged misconduct by the enforcement division, including reliance on a questionable whistleblower, improper regulatory pressure and efforts to prevent the disclosure of evidence. In that filing, the commission said it had concluded the complaint should never have been brought. The reversal capped a turbulent stretch at the agency: in September 2025, then-nominee Brian Quintenz published text messages with the Winklevoss twins, claiming they pressed him over the Gemini case and then pushed the White House to stall his confirmation. Trump withdrew the nomination and installed Michael Selig as chair, and Selig, the CFTC's only sitting commissioner, has since expanded crypto oversight. Gemini, meanwhile, is stacking approvals for a “full-stack” marketplace. Affiliate Gemini Titan won Designated Contract Market status in December 2025 to launch a prediction market, and affiliate Gemini Olympus received a Derivatives Clearing Organization license in May 2026. Earlier this year the exchange also said it would exit the U.K., the European Union and Australia and cut 25% of its workforce to concentrate resources on the US.

Our reading of the order: Hellerstein has drawn a clean line between policy and adjudication, and that line now works against both parties at once. A friendlier regulatory climate in Washington does not retroactively erase court judgments, even when the regulator and the company agree they should disappear. For Gemini, the injunction is a fixed feature of its record at the exact moment it pursues a complete CFTC license suite spanning spot, crypto options, perpetuals and predictions. The agency's own concession that its enforcement division used inappropriate tactics did not move the court, which suggests any future vacatur bid needs genuinely changed facts, not changed politics. The license pipeline, notably, proceeds regardless.