A U.S. federal judge rejected a joint request by the Gemini platform and the U.S. Commodity Futures Trading Commission (CFTC) to vacate a $5 million settlement, even though the commission itself had concluded that it might not have pursued the case under its current enforcement standards.
U.S. District Judge Alvin Hellerstein ruled that the CFTC’s shifting enforcement priorities, along with the allegations against the agency’s Enforcement Division, did not provide sufficient grounds to set aside the settlement reached in January 2025.
CFTC and Gemini had asked the court on May 27 to set aside the agreement, following an internal review by the agency that pointed to allegations of misconduct by its enforcement division, including reliance on a questionable whistleblower, improper regulatory pressure, and efforts to prevent the disclosure of evidence.
But the ruling left in place a permanent injunction barring Gemini from making false or misleading statements to the CFTC. The settlement also included a ban on the platform publicly denying its findings, although the agency said in June that it would not continue enforcing these restrictions.
Gemini had already paid the $5 million fine, a step the CFTC previously said would not be reversed even if the settlement were later set aside.
Why did the judge reject the request?
Hellerstein explained that Gemini knew about problems with the case before agreeing to the settlement, less than three weeks before the trial date. Although the platform later obtained additional internal documents from the CFTC, the judge found that this new information did not meet the threshold for overturning an agreement Gemini had accepted voluntarily.
The judge also rejected reliance on President Donald Trump's executive order on digital assets and the agency's new enforcement approach, finding that these developments represented a change in policy, not a fundamental change in the law.
What does the case mean for similar companies?
The case highlights how difficult it can be to back out of enforcement settlements once they have been signed, even when a regulator's priorities change or new internal information later comes to light. For cryptocurrency companies operating in the United States, the ruling underscores the importance of carefully assessing legal and compliance risks before accepting any settlement, because overturning it later may be more complicated than it seems.
These developments come amid ongoing debate over the limits of U.S. regulators' authority in dealing with the digital asset sector, and whether changes in regulatory approach are enough to reopen cases that have already been closed.