TL;DR
- A federal judge in New York rejected a joint request by Gemini and the CFTC to overturn a ruling that imposed a $5 million penalty on the exchange.
- The CFTC argued that it would not have filed the original lawsuit against Gemini under its current enforcement priorities.
- The court found that neither party had presented sufficient grounds to modify a judgment voluntarily accepted before trial.
A U.S. federal judge rejected a joint request by Gemini and the Commodity Futures Trading Commission (CFTC) to overturn a ruling that required the exchange to pay a $5 million penalty.
Judge Alvin Hellerstein of the Southern District of New York determined that the arguments presented by both parties did not justify reopening the case, which was resolved through a court-approved settlement in January 2025.
The original ruling settled a lawsuit filed by the CFTC in 2022, which accused Gemini of providing false or misleading information to agency officials during the review of a proposed Bitcoin futures contract.
Gemini and the CFTC Sought to Overturn the 2025 Settlement
The settlement was reached three weeks before the trial was scheduled to begin. Gemini agreed to pay $5 million, an amount it has already paid, and became subject to a permanent injunction prohibiting it from making false or misleading statements or omitting information when dealing with the CFTC.
On May 28, 2026, both parties jointly requested that the judgment be vacated.
The CFTC acknowledged that it should not have filed the lawsuit and argued that the case would not have been pursued under its current enforcement priorities.
Gemini, meanwhile, argued that it had accepted the settlement because of pressure from regulatory authorities.
However, Hellerstein stated that none of these arguments provided sufficient grounds to modify the court’s ruling.
Judge Rejects Arguments Over Regulatory Pressure
In his ruling, the judge explained that the facts cited by both parties already existed when the settlement was signed and did not constitute subsequent changes that would justify vacating it.
He also held that the CFTC’s revised assessment of whether the lawsuit should have been filed does not require the court to overturn the judgment.
Regarding Gemini, the judge rejected the argument that regulatory pressure demonstrated that the exchange had accepted the settlement involuntarily.
Hellerstein noted that the company had litigated the case for approximately three years and was aware of the internal issues related to the proceedings, including a fraud scheme involving its former chief operating officer.
According to the court, Gemini made a calculated decision to settle shortly before trial.
The ruling leaves both the $5 million penalty, which has already been paid, and the permanent prohibition against providing false or misleading information to the CFTC in place.
