- CFTC said the original Gemini complaint relied on weak evidence and would not satisfy current enforcement standards.
- Gemini already paid the $5M penalty, but regulators now seek to remove remaining injunctive obligations from the deal.
- The agency claimed investigators withheld evidence and improperly pressured Gemini during the enforcement process.
The Commodity Futures Trading Commission and Gemini Trust Company jointly moved on May 27 to vacate parts of a 2025 consent order tied to a $5 million settlement. The filing came in the U.S. District Court for the Southern District of New York after the agency reviewed its earlier enforcement action. According to the CFTC, the original complaint relied on flawed evidence and would not meet current enforcement standards.
CFTC Review Questions Original Complaint
The CFTC originally sued Gemini in June 2022 over alleged misleading statements tied to a Bitcoin futures product application. However, the agency now says the complaint should never have been filed.
According to the CFTC, investigators relied heavily on a whistleblower account lacking credibility. The agency also said evidence supporting the complaint raised serious weaknesses during the review process.
Additionally, the CFTC stated that requested evidence was withheld from a Commissioner before the agency voted on the complaint. The review also found that litigation counsel blocked Gemini from accessing material needed for its defense.
The agency further claimed that personnel improperly used regulatory authority to increase settlement pressure on Gemini during the case.
Gemini Already Paid The $5 Million Penalty
Gemini resolved the case through a consent order in January 2025 without admitting wrongdoing. The crypto exchange already paid the $5 million civil monetary penalty required under the settlement.
However, the current motion seeks to remove the remaining prospective provisions, including injunctive relief against Gemini. The CFTC argued that continuing those obligations would not serve the public interest.
The agency also described Gemini as a victim in a broader rebate-fraud scheme involving two customers. According to the filing, the customers admitted defrauding Gemini of $7.5 million through coordinated activity.
Enforcement Approach Faces Fresh Scrutiny
The reassessment arrives as federal agencies revisit earlier crypto enforcement actions. The CFTC said it reviewed changes in digital asset policy across multiple government agencies before joining Gemini’s motion.
Tyler Winklevoss and Cameron Winklevoss, Gemini’s co-founders, previously supported Donald Trump’s 2024 presidential campaign. Meanwhile, Mike Selig now leads the CFTC after Trump backed the former crypto industry lawyer for the role.
