CFTC Attempts to Overturn Previous Gemini Settlement Deal

The Commodity Futures Trading Commission claimed that its settled complaint filed during the Biden administration relied heavily on allegations from a whistleblower who said Gemini inflated trading activity to distort user demand.

The Commodity Futures Trading Commission has asked a federal court to vacate its $5 million settlement with Gemini, arguing that the enforcement action was based on flawed allegations.

Gemini settled with the Commodity Futures Trading Commission and paid a $5 million fine in January 2025 during the final weeks of the Biden administration after false or misleading statements tied to a Bitcoin futures contract were alleged by the agency.

A joint motion was filed by the Commodity Futures Trading Commission and Gemini in a Manhattan court on Wednesday seeking to vacate the settlement, with the agency stating that after reviewing the matter, it concluded the “complaint should not have been filed — and would not have been under current enforcement standards.”

The Commodity Futures Trading Commission said the complaint, which was brought during the Biden administration, was “largely based on a whistleblower’s account known to be lacking in credibility.”

“Accordingly, the CFTC determined that continuing enforcement of the consent order’s prospective provisions serves neither the CFTC’s mission nor the public interest,” it said.

The request from the Commodity Futures Trading Commission adds to a growing list of crypto lawsuits and investigations that have been dropped by the agency and the Securities and Exchange Commission under Donald Trump.

Tyler Winklevoss and Cameron Winklevoss each donated $1 million to Donald Trump’s 2024 election campaign.

The motion from the Commodity Futures Trading Commission came after Brian Quintenz, a former CFTC chair nominee under Donald Trump, shared messages on X in September from Tyler Winklevoss asking whether the agency’s case against Gemini would be reviewed if he became chair.

Donald Trump later withdrew Brian Quintenz’s nomination and instead backed Mike Selig, a former lawyer for crypto firms who has taken a supportive stance toward the cryptocurrency industry.

CFTC Seeks to Remove Remaining Injunctions From Gemini Settlement

The request from the Commodity Futures Trading Commission seeks to remove ongoing obligations imposed on Gemini under the settlement, including an injunction that bars the company from making false or misleading statements to the agency.

“Applying the remaining provisions — including injunctive relief — prospectively would not be equitable,” the Commodity Futures Trading Commission said. The agency noted that a $5 million fine had already been paid by Gemini, though it remained unclear whether the penalty would be refunded.

The case stemmed from allegations that misleading statements were made by Gemini in 2022 during the review of a Bitcoin futures contract, particularly concerning its auction volumes and liquidity.

The Commodity Futures Trading Commission said the claims were considered relevant in evaluating risk and approving the contract.

The complaint from the Commodity Futures Trading Commission relied on allegations made by a whistleblower in 2017, who claimed that trading activity and volumes were inflated by Gemini to distort user demand.

The agency argued in its latest filing that the whistleblower’s allegations were based on statements from Gemini’s former chief operating officer and a subordinate who allegedly threatened Cameron Winklevoss and Tyler Winklevoss, and was allegedly known for lying about material facts.

The Commodity Futures Trading Commission also argued that Gemini was itself a victim of fraud, claiming that a coordinated rebate-fraud scheme was used by two customers to exploit the exchange’s preferential fee structures.

It also alleged that $7.5 million was admitted to have been fraudulently taken from Gemini by the two customers through the scheme, but “nothing was done with those admissions” by the previous leadership.