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The U.S. Commodity Futures Trading Commission has asked a federal judge to unwind its January 2025 settlement with Gemini Trust, saying the agency now believes the case should not have been filed.
In a joint motion filed in the Southern District of New York, the CFTC and Gemini asked the court to vacate the consent order. They said the complaint would not have been brought under the agency’s current enforcement standards.
$5M Penalty and Injunction Face Court Review
The original case accused Gemini of making false or misleading statements to the CFTC during the 2017 review of a Bitcoin futures product tied to the Gemini Bitcoin Auction. Gemini agreed in January 2025 to pay a $5 million civil penalty and accept a permanent injunction, without admitting or denying the findings.
The CFTC’s new request focuses mainly on the future-facing restrictions in that consent order. The agency said the $5 million penalty and other past obligations have already been satisfied. It remains unclear whether Gemini would recover the funds if the court grants the motion.
CFTC Says Gemini Case Should Not Have Been Filed
The CFTC’s new position is unusually direct. In its May 27 announcement, the agency said its internal review found the complaint was largely built on a whistleblower account “known to be lacking in credibility.”
The CFTC also said Gemini had been the victim of fraud by its former chief operating officer and two customers. The agency further said personnel improperly used regulatory authority to create settlement leverage. It said the complaint would not have been filed under the government’s current digital asset enforcement approach.
Gemini Titan Pressure Cited in Settlement Motion
The filing also says enforcement staff used Gemini’s separate Gemini Titan application as pressure while the case was pending. According to the motion, internal messages showed staff discussing delays to the application during the enforcement action. The parties argued that this kind of leverage would be improper in any setting.
Gemini Titan was later approved in December 2025. That detail matters because the CFTC is not only revisiting the strength of the original complaint. It is also questioning how the agency handled its own regulatory power during settlement talks.
Dismissal With Prejudice Could Follo
If the court grants the motion, the permanent injunction and formal settlement order would be removed. The CFTC said it would then move to dismiss the complaint with prejudice, meaning the same claims could not be refiled.
That would mark a sharp reversal for a case the agency once framed as protecting the integrity of its product-certification process.
For Gemini, the motion could remove a major regulatory stain. For the CFTC, it signals a broader shift in how the agency wants to handle digital asset enforcement under its current standards.
