Judge keeps Gemini’s CFTC consent order despite joint challenge

A federal judge on October 15 rejected a joint request by Gemini Trust and the Commodity Futures Trading Commission to vacate continuing provisions of their 2025 consent order, leaving the cryptocurrency exchange subject to a permanent injunction.

The decision matters beyond Gemini because the regulator itself had disavowed the enforcement case and supported relief. The court nevertheless concluded that allegations about the earlier investigation and a later change in federal crypto-enforcement policy did not satisfy the legal standard for reopening the judgment.

A settled case remains settled

The CFTC sued Gemini in 2022 over statements made during the regulator’s review of a proposed bitcoin futures contract that would have used prices from Gemini’s auction. The parties settled shortly before a scheduled trial, and the court entered their consent order in January 2025.

That order required Gemini to pay a $5 million civil monetary penalty and imposed a permanent injunction against making materially false or misleading statements to the CFTC. The agency said at the time that the case concerned representations about prefunding, self-trading controls, fee rebates, trading volume and liquidity during its 2017 review.

Gemini paid the penalty. When the company and regulator jointly sought relief in May 2026, the CFTC said the money would not be returned even if the court removed the order’s prospective provisions. The October 15 ruling therefore preserves continuing restrictions; it does not create another $5 million liability or require a second payment.

According to contemporaneous reporting on the decision, U.S. District Judge Alvin Hellerstein found that Gemini voluntarily settled while already aware of weaknesses it perceived in the government’s case. Materials obtained later may have caused the company to regret settling, the court reasoned, but they did not amount to the post-judgment change required to make continued enforcement inequitable.

The regulator had reversed its position

The CFTC’s May motion followed an internal review conducted under a different administration and enforcement leadership. The agency said the original complaint would not have been filed under its current standards.

It alleged that enforcement personnel relied substantially on a whistleblower account known to have credibility problems, withheld requested support before the Commission voted to sue and used regulatory leverage during settlement negotiations. Those are the current CFTC’s findings about its own earlier process, not new trial findings against former employees or a judicial determination that misconduct occurred.

The parties also cited President Donald Trump’s digital-asset executive order and revised federal enforcement priorities. Reporting on the October decision says the court treated those developments as policy changes rather than a significant change in law. Agreement between the regulator and the regulated company therefore was not enough, by itself, to displace the court-approved settlement.

What the ruling does not decide

The result does not represent a trial verdict on the CFTC’s original allegations. Gemini settled before trial, and the consent order resolved the action without the evidentiary record being tested through a completed trial.

Nor did the October ruling validate every step of the agency’s investigation. Its narrower effect is procedural: the reasons offered by both parties did not meet the standards for relief from the existing judgment.

The case also illustrates a limit on rapid enforcement-policy reversals. An agency can close investigations, change charging standards and decline to enforce certain provisions as a matter of discretion, but a final federal judgment remains under judicial control. Parties seeking to undo one must satisfy the rules governing post-judgment relief, even when they now agree that the original result should not continue.

Coinburn is reporting the October 15 decision on October 16. The next material development would be an appeal, a request to modify narrower provisions or a formal statement explaining how the CFTC intends to administer the surviving order. Until then, the consent order remains intact, while the agency’s later criticism of its original case remains an allegation from its internal review rather than a separate judicial finding.