A federal judge in New York has rejected a joint request by Gemini and the Commodity Futures Trading Commission to undo their $5 million settlement, leaving the previously paid penalty and a permanent injunction in place.
Judge Alvin Hellerstein of the Southern District of New York denied the request on October 15, according to The Block's report of the ruling. The two parties had sought relief from the January 2025 consent order after the regulator changed its assessment of the enforcement case.
Agreement between the parties did not reopen the judgment
The Block reported that the judge found the arguments insufficient to disturb the order. The CFTC's current view that the case should not have been brought did not require the court to grant relief, while information that existed before settlement was not a new factual circumstance merely because it was reassessed later.
Gemini had also argued that regulatory pressure affected its decision to settle. The court noted the company's extended litigation and its decision to resolve the case shortly before trial, according to the report.
The outcome leaves an important distinction between agency policy and a court order. The regulator can change its position, but a judgment does not disappear simply because the parties now agree that they would prefer another result.
The original case concerned statements about a Bitcoin auction
The CFTC's January 2025 announcement described an order addressing materially false or misleading statements and omissions made during review of a proposed Bitcoin futures contract.
The proposed contract would settle by reference to an auction on Gemini. The regulator said the statements concerned matters including prefunding, self-trading prevention, fee rebates, volume and liquidity, all relevant to assessing whether the futures contract would be susceptible to manipulation.
The consent order imposed a $5 million civil monetary penalty and a permanent injunction. The current dispute concerns whether that existing resolution should be reopened; the October ruling does not impose another $5 million penalty on top of it.
The link between a spot auction and a derivatives settlement price explains why the information mattered. If a futures payment depends on a particular auction, the controls and activity in that auction affect the integrity of the reference used for settlement.
A narrower result than a decision on crypto policy
The ruling does not decide the entire boundary of federal crypto regulation or establish that a particular exchange service is available. It concerns relief from an existing judgment in this case.
Our guide to US crypto regulation explains the separate roles of agencies, legislation and courts. Those institutions can affect the same market through different legal processes.
For companies with settlements already entered, the distinction is material. A more favorable policy environment can change future enforcement priorities while leaving earlier court-ordered obligations in force. The terms of an existing order and the available procedure for changing it remain relevant.
The immediate result for Gemini is that the paid penalty and injunction survive the joint request. The decision provides no basis to describe the settlement as cancelled, the funds as refunded or the original judgment as erased.