In a joint court filing, both parties asked a federal court to vacate the January 2025 settlement tied to Gemini’s proposed Bitcoin futures contract. The regulator said the original case relied heavily on a whistleblower whose credibility is now being questioned and argued that continuing the settlement’s remaining provisions would not serve the public interest.
CFTC Moves to Undo Gemini Crypto Case
The US Commodity Futures Trading Commission (CFTC) now wants to reverse its own enforcement action against crypto exchange Gemini after concluding that the case likely would not have been filed under the regulator’s current standards. In a joint motion that was submitted Wednesday in a Manhattan federal court, both the CFTC and Gemini requested that the court vacate the January 2025 consent order that settled allegations related to Gemini’s proposed Bitcoin futures contract.
Earlier this year, Gemini agreed to pay a $5 million civil penalty to settle claims that it provided misleading information to regulators during the approval process for what was expected to become the first regulated Bitcoin futures contract in the United States. The settlement was reached without Gemini admitting or denying wrongdoing.
Part of the motion that was filed in a Manhattan court
In its latest filing, however, the CFTC argued that maintaining the remaining terms of the settlement would no longer serve the public interest. The regulator specifically asked the court to remove ongoing obligations tied to the agreement, including a permanent injunction that prevents Gemini from making false or misleading statements to the agency in the future.
According to the filing, the original lawsuit heavily relied on testimony from a whistleblower whose credibility the agency now openly questions. The CFTC stated that the complaint was “largely based on a whistleblower’s account known to be lacking in credibility” and further admitted that the case “would not have been” pursued under the agency’s current enforcement approach.
The allegations originally stemmed from events between July and December of 2017, when Gemini was seeking approval for its Bitcoin futures product. At the time, regulators accused the exchange of providing inaccurate or misleading details about auction volume and market liquidity, which were considered important factors in assessing the risks associated with the futures contract.
Gemini consistently denied the allegations throughout the legal battle and held firm that there was no evidence of Bitcoin price manipulation or investor harm. The company argued that its conduct did not mislead regulators and that the enforcement action was unjustified.
The CFTC’s revised position also introduced new details regarding internal concerns tied to the original whistleblower claims. According to the agency, the allegations were supported by statements from Gemini’s former chief operating officer and another subordinate who allegedly threatened Gemini founders Cameron and Tyler Winklevoss and were “known to lie about material facts.”
Cameron and Tyler Winklevoss
At the same time, the regulator claimed Gemini itself was actually victimized through a rebate fraud scheme that involved two customers who allegedly exploited the exchange’s fee structure. The CFTC stated that the customers admitted to defrauding Gemini of approximately $7.5 million, but prior agency leadership reportedly failed to take meaningful action despite those admissions.
Although the CFTC and Gemini are now jointly requesting that the settlement be vacated, the regulator did not clarify whether Gemini would receive a refund of the $5 million penalty already paid if the court approves the request.