Judge Refuses to Undo Gemini's $5M CFTC Settlement Despite Joint Motion

A federal judge refused on Thursday to undo the settlement that closed the Commodity Futures Trading Commission's case against Gemini, even though the agency had joined the exchange in asking him to. Judge Alvin Hellerstein denied a joint motion to vacate the consent order entered in January 2025, under which Gemini Trust Company paid a $5 million civil penalty and accepted a permanent injunction. The CFTC told the court the complaint would not have been brought under its current enforcement standards. Gemini said regulatory pressure had made the settlement something other than voluntary. Neither argument moved him.

A motion nobody opposed

The filing was joint, which is the unusual part. The Block and The Crypto Times date it 28 May 2026; Cointelegraph puts it a day earlier, on 27 May. The two accounts do not reconcile, and the desk could not establish which date sits on the docket. Both describe the same relief: vacatur under Rule 60 of the Federal Rules of Civil Procedure, the provision that lets a court release a party from a final judgment. The Crypto Times names the subsection, Rule 60(b). The Block does not name the rule at all.

The grounds went further than a change of mind. As the parties' filing is described by Cointelegraph, FinanceFeeds and The Crypto Times, an internal agency review found the case leaned on a whistleblower whose credibility was in question. The same review is described as finding that information was kept from a commissioner and that regulatory pressure was applied during settlement talks. Those are the parties' characterisations. The court made no findings on them. The standard the agency measured the old case against is its present one, the same posture behind its move to ask for comment before writing rules on leveraged crypto.

Why that was not enough

Hellerstein treated the reassessment as a change in priorities rather than a change in the law. He found the material Gemini obtained after the order concerned facts that existed when it was entered, calling it "Newly acquired knowledge of facts that existed at the time the Consent Order was entered." On the pressure point he noted the company litigated for about three years before settling, roughly three weeks before trial.

"The CFTC's present assessment that this action should not have been brought does not require vacatur or other relief," the order said, in language The Block quoted on Friday.

Gemini, the judge wrote, "made the calculated decision to settle the case shortly before trial." The Block and CoinDesk carry that line in identical wording. Regret is not a changed circumstance, he held. FinanceFeeds reports he also turned down an attempt to route later evidence through a broader part of Rule 60, past its one-year deadline.

What the 2022 complaint said

The filing date is itself contested. The Crypto Times and FinanceFeeds say the CFTC sued in June 2022, The Block calls it a 2022 lawsuit, and CoinDesk's text says 2023 while the docket path inside its own link reads 2022. Three accounts and the path point to 2022, so that is what we use. The discrepancy stands. The complaint concerned statements made to agency staff during a 2017 review of a proposed bitcoin futures contract. Gemini was alleged to have called its platform fully prefunded without disclosing that some customers could trade on loans from people connected to the company, and to have said self-trading was prevented when it was not.

The parts that still bind

The injunction survives. It permanently bars false or misleading statements or omissions to the CFTC, and the consent order separately bars Gemini from publicly denying its findings. Cointelegraph alone reports the agency said in June it would stop enforcing that second restriction; no other outlet swept carries it. Settlement terms outlive the money, as New York's Celsius matter showed when it closed with a lifetime ban and a conditional $35 million. The penalty is not coming back either: the parties agreed it would not be refunded even if the motion succeeded. Neither Gemini nor the CFTC had commented on the ruling by Friday, and no appeal has been reported.