What changed

A settlement doesn’t disappear just because the regulator who demanded it changes its mind. That’s the practical effect of a ruling from U.S. District Judge Alvin Hellerstein of the Southern District of New York, who on Oct. 15 denied a joint motion from Gemini and the Commodity Futures Trading Commission to vacate the $5 million settlement the exchange signed in January 2025, according to Decrypt.

The ruling is notable because it wasn’t an adversarial fight. Gemini and the agency that sued it had teamed up months earlier to ask the court to erase the deal, arguing the case never should have been brought under the CFTC’s current enforcement posture, according to CoinDesk. Hellerstein said no to both of them.

Key Takeaways

  • Judge Alvin Hellerstein denied a joint motion by Gemini and the CFTC to vacate the $5 million settlement Gemini signed in January 2025.
  • A permanent injunction barring Gemini from making false statements to the CFTC stays in place, and the $5 million penalty, already paid, will not be refunded.
  • The CFTC argued its own 2022 case against Gemini wouldn’t have been filed under the agency’s current enforcement priorities; the judge said that shift wasn’t grounds to undo a signed judgment.
  • The case traces to a CFTC lawsuit over statements Gemini made regarding a proposed bitcoin futures product; Gemini settled roughly three weeks before trial.
  • The ruling lands as the CFTC under Chair Mike Selig takes a friendlier approach to crypto, including recently approving Gemini’s expanded prediction-market and perpetual-futures offerings.

What the ruling actually leaves in place

Hellerstein’s order keeps the January 2025 consent order intact in full. That means the permanent injunction barring Gemini from making false or misleading statements to the CFTC remains binding, as does the provision against publicly denying the settlement’s findings, even though the agency has said separately it would no longer enforce that gag-style piece, according to Decrypt. The $5 million penalty Gemini already paid stays with the government. Both sides had agreed in advance that Gemini would not get a refund even if the motion to vacate succeeded, according to CNA.

The distinction matters for a simple reason: nothing about Gemini’s regulatory posture changes today. The exchange remains under the same restrictions it accepted 21 months ago, regardless of how the CFTC now characterizes the case it brought.

The case the settlement resolved

The dispute goes back to a CFTC lawsuit alleging Gemini made false or misleading statements to the agency during its review of a proposed bitcoin futures contract, a product tied to the regulator’s 2017-era scrutiny, according to CoinDesk. Gemini fought the case for roughly three years before settling in January 2025, about three weeks ahead of trial, without admitting or denying the allegations.

Then, in May, Gemini and the CFTC jointly asked Hellerstein to wipe out that settlement, arguing the original enforcement effort had violated principles of fair enforcement and that the agency had “resorted to inappropriate tactics” to bring the suit, according to CNA. It was, as Decrypt described it, a rare instance of a court holding firm while a regulator tried to retreat from its own case.

Why the judge wasn’t persuaded

Hellerstein’s reasoning rested on two rejected arguments. He found that neither a shift in the CFTC’s enforcement priorities under the current administration nor allegations of misconduct inside the agency’s enforcement division met the legal bar required to reopen a signed judgment. “Neither of these two grounds is sufficient to support vacating the settlement,” he wrote, according to Decrypt.

He also rejected Gemini’s separate claim that it had been coerced into settling, according to CoinDesk. Law360 reported the judge found “no significant change of facts” and that a crypto policy shift under the current administration “doesn’t negate the deal,” according to Law360. CoinDesk’s account of the order captured Hellerstein’s view of the timing: “Gemini litigated the case for approximately three years, and then, despite the preceding facts, made the calculated decision to settle the case shortly before trial,” he wrote.

The backdrop: a friendlier CFTC, an unmoved court

The ruling arrives in the middle of a broader turn by the CFTC toward accommodating the crypto industry, including no-action relief letting crypto apps offer regulated derivatives and a floated plan to bring crypto exchanges under federal oversight, according to Decrypt. Gemini itself recently won approval from the Selig-led CFTC to broaden its prediction-market and perpetual-futures offerings, even as the settlement’s restrictions stay on the books.

CoinDesk noted Gemini’s wider business context: the exchange has announced plans to exit the U.K., European Union and Australia and cut 25% of its workforce this year as it shifts resources toward U.S. prediction markets, while continuing to operate in Singapore. The settlement’s unchanged terms sit alongside that pivot rather than blocking it outright, since Gemini can still operate and launch new products in the U.S.

The ruling signals that Washington’s lighter touch on crypto enforcement doesn’t retroactively unwind judgments already entered in federal court. Gemini and the CFTC did not immediately respond to requests for comment, according to CNA, leaving open whether either side will pursue further options to challenge the consent order’s remaining terms.

Sources