At a glance

  • A federal judge in Manhattan denied a joint motion by the Commodity Futures Trading Commission (CFTC) and Gemini Trust Company to vacate the January 2025 consent order that imposed a $5 million civil penalty and a permanent injunction on the exchange.
  • The order, filed on 15 October, leaves the injunction and Gemini’s agreement not to publicly deny the case’s findings in force, while noting the CFTC still controls whether it seeks to enforce the order.

US District Judge Alvin K. Hellerstein of the Southern District of New York denied the motion in an eight-page order and opinion filed on Thursday in CFTC v. Gemini Trust Company, 22 Civ. 4563. Gemini has already paid the penalty, the order notes.

The CFTC sued Gemini on 2 June 2022, alleging false or misleading statements to agency staff during the review of a planned bitcoin futures contract priced off an auction run on Gemini’s own exchange. The case settled with roughly three weeks left before trial; the consent order was entered on 6 January 2025.

What the parties asked for

On 28 May 2026 the two sides jointly asked the court to vacate the consent order or, failing that, its forward-looking provisions. According to the order, they cited the CFTC’s current enforcement policy, shaped in part by President Donald Trump’s January 2025 executive order on digital assets, and a post-settlement internal review that led the agency to conclude it would not file the complaint under today’s standards. They also argued that the agency’s enforcement division had used inappropriate tactics, including relying on a questionable whistleblower.

Rule 60(b) of the federal civil rules lets a court release a party from a final judgment only on narrow grounds, for example when facts or law have shifted materially since it was entered.

What the court said

Hellerstein found neither. “Newly acquired knowledge of facts that existed at the time the Consent Order was entered does not constitute a significant change in factual circumstances,” he wrote. In his reading, the 2025 executive order, the Justice Department’s “Ending Regulation by Prosecution” memo and the CFTC’s new stance amount to “a change in enforcement priorities and policies,” not a change in law.

Nor did the judge accept that Gemini signed under duress. The exchange had lawyers, fought the case for more than three years and chose to settle shortly before trial, the order says. Claims about new evidence or misconduct fall under parts of the rule with a one-year deadline, which had passed.

The court did leave one door open. “The CFTC retains discretion over its enforcement priorities,” the order says, and the agency remains free to account for its current policies in deciding whether to seek enforcement of the consent order.

Context

The ruling lands as the CFTC reworks its crypto approach, including its advance notice of proposed rulemaking on retail crypto transactions. It is narrower than the week’s other Washington stories, such as the WSJ report on Bo Hines and Tether-linked payments: one settled case, and the limits on undoing it.

What happens next

The consent order stays in place unless a higher court disturbs it. Under the federal appellate rules, when a US agency is a party to a civil case, a notice of appeal is due within 60 days of the order, which would run to about 14 December 2026.

This article is for information only and is not investment advice.