The Commodity Futures Trading Commission has done something rare: it asked a federal court to undo a judgment it won just months ago. In a joint filing with Gemini Trust Company, the agency argued the $5 million settlement and injunction it secured in January should be partially vacated. The reason, the CFTC now says, is that the original case against the crypto exchange should never have been brought in the first place.
Agency says it got it wrong
The CFTC said it conducted a thorough reexamination of the matter, including the full investigation history, the evidence gathered, the decision to file charges, and the subsequent litigation. Its conclusion: the complaint should not have been filed and would not have been brought under the agency's current enforcement approach. That marks a sharp reversal from the final weeks of President Joe Biden's administration, when the CFTC announced a settlement with Gemini over alleged false statements during the exchange's registration process.
The case was filed in 2022. The CFTC now says there were serious questions about the strength of the evidence against Gemini. The complaint relied heavily on a whistleblower account that the agency described as lacking credibility. Investigators, the CFTC argued, were not focused on alleged fraudsters but instead pursued Gemini, which the agency now characterizes as a fraud victim, for purported false statements during registration.
Whistleblower account flagged as shaky
At the heart of the government's reconsideration is the whistleblower. The CFTC said the account that formed the basis of the charges was not credible. The agency also asserted that personnel improperly influenced the CFTC's regulatory authority to create settlement leverage. Those findings led the commission to determine that keeping the injunction in place would not be equitable, and that pursuing enforcement of the consent order's prospective provisions would no longer serve the regulator's mission or the public interest.
Penalty paid, but injunction still stands
Gemini settled the CFTC's charges in January 2025, paying a $5 million civil monetary penalty and agreeing to an injunction barring false or misleading statements to the agency. That non-prospective part of the consent order — the fine — has already been satisfied. But the CFTC now argues the remaining prospective elements, specifically the injunction, should be lifted. The agency said doing so would not undermine enforcement goals, as the penalty has been paid and the case's underlying theory has been rejected by the agency itself.
What comes next
The joint request now sits before a federal judge, who must decide whether to grant the relief both parties are seeking. The case is a reminder that agencies can change their minds — even after a settlement is signed. For Gemini, the request could wipe away the last vestiges of a legal battle that the government now admits it should not have started.
