CFTC Joins Gemini Request to Lift Settlement Restrictions

The Commodity Futures Trading Commission on May 27 asked a federal court to lift remaining settlement restrictions on Gemini, joining the crypto firm in a motion to vacate prospective provisions tied to a January 2025 consent order after the $5 million civil penalty was paid.

The matter began in June 2022 in the U.S. District Court for the Southern District of New York, where the CFTC alleged Gemini made false or misleading statements during a registration process for a bitcoin futures product. Gemini Trust Company LLC has satisfied the settlement’s monetary penalty; the joint filing asks the court to remove the forward-looking restrictions that remain.

An internal CFTC review examined the investigation’s history, litigation strategy, the evidentiary record and changes in federal digital-asset enforcement policy. The review concluded, “the complaint should not have been filed – and would not have been under current enforcement standards.” It identified concerns about the credibility of a whistleblower account, the handling of evidence and aspects of litigation conduct.

Commission staff reported that evidence requested by a commissioner was withheld before the agency voted on the complaint. The court filing also states litigation counsel blocked access to materials Gemini considered necessary for its defense and asserted deliberative-process privilege during discovery disputes.

The agency argued that continuing to enforce the consent order’s prospective provisions “serves neither the CFTC’s mission nor the public interest.” The joint motion asks the court to vacate those provisions; the court will decide whether to grant that relief.

Federal regulators have taken steps to coordinate oversight of digital assets. In March the Securities and Exchange Commission and the CFTC signed a memorandum of understanding to harmonize supervision and reduce duplicative enforcement. On May 19 the CFTC published rules explaining when firms may receive cooperation credit or a declination after self-reporting and remediation.

Gemini, founded in 2014 by Cameron and Tyler Winklevoss, operates a regulated digital-asset marketplace and holds a New York trust charter from the New York State Department of Financial Services, which allows it to offer custody and trading services under state oversight. The company has described itself as focused on compliance throughout the litigation.