US District Judge Alvin K. Hellerstein of the Southern District of New York (SDNY denied a joint motion by the Commodity Futures Trading Commission (CFTC) and Gemini Trust Company LLC seeking to vacate a consent order entered on January 6, 2025.
The order resolved a 2022 enforcement action and required the cryptocurrency exchange, founded by Cameron and Tyler Winklevoss, to pay a $5 million civil monetary penalty while imposing a permanent injunction.
Both the paid penalty and the injunction remain in effect.
The original lawsuit, filed in June 2022 as CFTC v. Gemini Trust Company, No. 1:22-cv-04563, alleged that Gemini made false or misleading statements of material fact, or omitted material facts, to agency staff during the CFTC’s review of a proposed Bitcoin futures contract between roughly July and December 2017.
The contract would have settled against a price determined by Gemini’s auction, so the auction’s susceptibility to manipulation was relevant.
The settlement addressed statements and omissions concerning trading prefunding, self-trading safeguards, fee rebates, and trading volume.
Gemini litigated the matter for approximately three years before agreeing to the consent order about three weeks before the scheduled trial.
It entered the order without admitting or denying the allegations or findings, except as to jurisdiction and venue.
The exchange has already paid the $5 million penalty, and the parties agreed the funds would not be returned.
In a May 28, 2026 amended motion under Federal Rule of Civil Procedure 60, the CFTC and Gemini jointly asked the court to vacate the judgment or, alternatively, to lift its prospective provisions.
They argued that the settlement violated bedrock principles of fair enforcement.
The agency reported that an internal review revealed evidentiary weaknesses—including reliance on a whistleblower account later viewed as lacking credibility—and inappropriate litigation tactics that had improperly leveraged regulatory authority to extract a settlement.
It described Gemini as a fraud victim in related matters and stated that the complaint would not have been filed under current enforcement standards.
The parties also cited shifts in digital asset policy under the subsequent presidential administration, including policies following an executive order on digital assets.
Judge Hellerstein held that these arguments did not supply sufficient grounds for relief.
Newly acquired knowledge of facts that already existed when the consent order was entered does not constitute a significant post-judgment change in factual circumstances.
The CFTC’s later assessment that the action should not have been brought, and changes in enforcement priorities, likewise do not amount to a significant change in the law.
Claims involving newly discovered evidence or misconduct fall under other Rule 60 provisions that carry a one-year deadline and cannot be recast under the catch-all provision to evade that limit.
The court rejected the contention that regulatory pressure made Gemini’s consent involuntary, noting that the exchange had counsel, had litigated for years, was aware of relevant internal issues (including a fraud scheme involving a former chief operating officer), and expressly agreed to settle voluntarily.
Later materials that may have caused regret do not render continued application of the order inequitable.
The ruling preserves the permanent injunction prohibiting Gemini from making false or misleading statements or omissions to the CFTC and from publicly denying the complaint’s allegations or the settlement’s findings.
The court terminated the motions and observed that the CFTC remains free to weigh its current policies in any future decisions about enforcing the consent order.
The decision illustrates the stringent standard courts apply before reopening final consent judgments, even when the regulator and the regulated party later align in seeking relief.