A federal judge in the Southern District of New York, Alvin Hellerstein, rejected the joint bid by the Gemini crypto exchange (NASDAQ: GEMI) and the Commodity Futures Trading Commission (CFTC) to remove a permanent order barring the exchange from misleading the US regulator.
Judge Hellerstein of the SDNY declined to reopen a consent order that goes back to January 2025. That ruling was two-fold:
- Gemini was handed a $5 million civil penalty
- The exchange was also permanently banned from making false or misleading statements to the CFTC
The exchange already paid the full $5 million fine long ago, as noted in the May joint filing by Gemini and the CFTC.
Whether the money would be returned if the court threw out the order was never specified. But the practical effect of vacatur would have fallen almost entirely on the injunction, with a favorable judgment entirely clearing the standing judicial finding that the exchange misled its regulator from the record.
SDNY said Gemini and CFTC did not present new facts
The CFTC and Gemini presented two different angles in their bid for the federal court to vacate the injunction.
The CFTC regulator argued that the 2022 complaint should never have been filed, and that the current regime would not have filed it under its regulatory scope. Gemini, on the other hand, built its case around its settlement being made under coercive regulatory pressure.
However, Hellerstein knocked back both arguments, writing in the judgment: “Newly acquired knowledge of facts that existed at the time the Consent Order was entered does not constitute a significant change in factual circumstances,” adding that “the CFTC’s present assessment that this action should not have been brought does not require vacatur or other relief.”
The SDNY judge also rejected Gemini’s coercion claim, writing that the exchange “made the calculated decision to settle the case shortly before trial,” after roughly three years of litigation. Hellerstein added that the exchange knew of its own internal problems, including its former chief operating officer’s fraud scheme.
Gemini entered a settlement about three weeks before the case was scheduled to go to trial.
The settlement, at the time, resolved a June 2022 suit accusing Gemini of making false or misleading statements to the CFTC in 2017 about the risks of manipulation in a proposed Bitcoin (BTC) futures contract.
The CFTC is expanding crypto oversight
The CFTC under the Trump administration has gained expanded regulatory oversight over the areas that most of Gemini’s expansion plans to become a “full-stack” marketplace run through.
Gemini President Cameron Winklevoss said the company is looking at products spanning crypto spot, predictions, futures, options and perpetual contracts. However, the court order from the 2022 settlement stays as a spot on the exchange’s record as it seeks a complete suite of licenses from the CFTC.
The exchange, through affiliates, is already stacking the approvals to launch its new products and services.
Gemini Titan became a Designated Contract Market (DCM) in December 2025 to launch a prediction market. A different affiliate, Gemini Olympus, received a Derivatives Clearing Organization license in May 2026.
A political path to the reversal
The joint motion filed in late May was itself the product of a turbulent year at the agency. In September 2025, then-nominee Brian Quintenz published texts with the Winklevoss twins, saying he released them because President Donald Trump “might have been misled.”
Quintenz claimed the brothers pressed him over the Gemini case, which Tyler Winklevoss called “lawfare trophy hunting,” and then pushed the White House to stall his confirmation.
Trump withdrew Quintenz’s nomination and later installed Michael Selig as CFTC chair. Under Selig, the commission reversed course on Gemini.
In its May filing, the CFTC said it “concluded the complaint should not have been filed,” and the agency found its enforcement division had “resorted to inappropriate tactics.”
Selig remains the CFTC’s only sitting commissioner, and this month, Cryptopolitan reported that the agency proposed its first crypto market rules after the CLARITY Act stalled in the Senate.
The smartest crypto minds already read our newsletter. Want in? Join them.