A federal judge in New York has refused to erase a $5 million settlement and permanent injunction imposed on Gemini, ruling that the Commodity Futures Trading Commission’s change in enforcement priorities does not undo a judgment the exchange agreed to shortly before trial.
U.S. District Judge Alvin K. Hellerstein of the Southern District of New York denied a joint CFTC-Gemini motion seeking to vacate the January 2025 consent order. The decision leaves both the paid civil penalty and the injunction in place, preserving a prohibition on Gemini making materially false or misleading statements or omissions to the regulator.
The dispute offers a clear limit on agencies and regulated companies attempting to revisit completed enforcement cases after a change in policy. The CFTC told the court it would not have brought the 2022 lawsuit under its renewed priorities, while Gemini argued that it settled under coercive regulatory pressure. Hellerstein found neither argument met the legal standard for reopening the case.
“Newly acquired knowledge of facts that existed at the time the Consent Order was entered does not constitute a significant change in factual circumstances,” the court wrote. The judge added that the CFTC’s current assessment of the lawsuit did not require the court to vacate the order or grant other relief.
A settlement reached weeks before trial
The January 2025 order resolved a CFTC lawsuit filed in 2022 against Gemini Trust Company LLC, the entity behind the Gemini crypto platform. The agency alleged that Gemini had made false or misleading statements of material fact to CFTC staff during discussions over a proposed Bitcoin futures contract.
According to the CFTC’s complaint, the statements concerned the self-certification process for a Bitcoin futures product that was later listed by the Cboe Futures Exchange. The regulator alleged that Gemini’s representations about the spot Bitcoin market and the futures contract’s protections against manipulation were inaccurate or incomplete.
Gemini neither admitted nor denied the CFTC’s allegations in settling the case. The consent order required the company to pay a $5 million civil monetary penalty, which the court noted had already been paid, and subjected it to a permanent injunction covering future representations to the agency.
The parties reached their agreement roughly three weeks before the scheduled start of trial. That timing was central to Hellerstein’s view of Gemini’s later claim that regulatory pressure had deprived it of a voluntary choice.
The judge wrote that the company had litigated the case for about three years before settling and had been aware of internal issues connected to a fraud scheme involving its former chief operating officer. The court concluded that Gemini “made the calculated decision to settle the case shortly before trial.”
CFTC’s reversal did not change the original record
The CFTC and Gemini filed their joint request to vacate the settlement on May 28, 2026. In that filing, the CFTC said its current leadership had reassessed the case and concluded the complaint should not have been filed under the regulator’s revised enforcement approach.
Federal agencies have discretion to set enforcement priorities, and a new leadership team can decide that certain past cases do not fit its preferred use of resources. But Hellerstein drew a distinction between an agency changing its view of an earlier lawsuit and a meaningful change in the facts or law governing a final court judgment.
The information raised in the motion, the judge found, concerned circumstances that existed before the settlement. A later shift in the CFTC’s assessment of those circumstances did not establish that the consent order had become inequitable or legally unworkable.
That reasoning leaves the order intact without requiring the court to determine whether the CFTC’s original theory would prevail if tried today. The ruling instead focuses on finality: parties that resolve a case through a negotiated court order face a high bar when seeking to unwind it after payment has been made and litigation has ended.
Permanent injunction remains part of Gemini’s record
The practical effect is narrower than a new enforcement action, but it is not merely historical. Gemini remains bound by the permanent injunction against false or misleading statements or omissions to the CFTC.
The injunction does not amount to a blanket restriction on Gemini’s operations. Its terms target the conduct alleged in the CFTC case: communications and representations made to the commodities regulator. Yet permanent injunctions are more durable than a one-time financial penalty because they can form the basis for further court action if a company violates them.
For crypto firms, the decision also reinforces that a regulator’s evolving policy position may affect pending cases more readily than closed settlements. Once a consent judgment has been entered, courts generally weigh the finality of litigation, the parties’ earlier choices, and the need for an actual change in circumstances rather than a retrospective disagreement with the government’s legal strategy.
Gemini has faced several high-profile legal and regulatory matters in recent years, including disputes connected to its former Earn lending program and the collapse of Genesis Global Capital. The CFTC case concerned a separate set of allegations involving Bitcoin futures representations, but Hellerstein’s reference to internal issues involving the company’s former chief operating officer shows that the court considered Gemini’s knowledge and litigation posture when assessing its claim of coercion.
The rejected motion means the CFTC’s revised enforcement priorities will not alter Gemini’s 2025 consent judgment. The $5 million penalty remains paid, and the permanent injunction remains enforceable unless a future court proceeding produces a different result.
For deeper context on enforcement and oversight, explore how crypto regulation in the US could evolve next.
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