A U.S. federal judge on Thursday denied a joint motion by cryptocurrency exchange Gemini and the Commodity Futures Trading Commission to overturn a $5 million settlement reached in January 2025, ruling that shifts in agency priorities and claims of internal enforcement problems did not provide sufficient grounds to set the agreement aside.

U.S. District Judge Alvin Hellerstein determined that Gemini had voluntarily settled the case less than three weeks before trial after litigating for roughly three years. The judge found that additional internal CFTC documents obtained later, along with the regulator’s revised view of the matter, failed to justify relief from the consent order.

Background of the Original Case

The CFTC filed suit against Gemini in 2023, alleging the exchange misled the agency during a 2017 review connected to a proposed bitcoin futures contract. According to the January 2025 consent order, Gemini did not disclose that certain customers traded using borrowed funds, that self-trading occurred despite existing safeguards, and that some traders received special fee arrangements. The exchange also provided trading volume data without revealing that portions of the activity involved those practices.

Gemini settled without admitting or denying the allegations. The company has already paid the $5 million civil penalty. The CFTC previously indicated the funds would not be returned even if the settlement were later vacated.

The Joint Request to Reverse the Deal

In late May, Gemini and the CFTC filed a joint request asking the court to undo the settlement. The agency cited an internal review that identified alleged misconduct within its enforcement division, including reliance on a questionable whistleblower, improper regulatory pressure, and efforts to withhold evidence. Officials stated the case would not have been pursued under the CFTC’s current enforcement standards.

The parties also pointed to broader policy developments, including a presidential executive order on digital assets and the regulator’s updated approach to crypto matters, as further support for withdrawing the agreement.

Court’s Reasoning

Judge Hellerstein rejected the arguments. He held that changes in enforcement priorities represented shifts in policy rather than a significant change in the law. Allegations of misconduct within the CFTC’s enforcement division and the new internal materials were likewise deemed insufficient to vacate a settlement Gemini had knowingly accepted.

The ruling preserves the permanent injunction that bars Gemini from making false or misleading statements to the CFTC. The consent order also contains language prohibiting the company from publicly denying the settlement’s findings, although the CFTC indicated earlier that it would no longer enforce such restrictions.

Ongoing Implications

Gemini, founded by Cameron and Tyler Winklevoss, remains free to operate in the United States and develop new products. The company has previously announced plans to exit certain international markets, including the United Kingdom, European Union and Australia, while reducing headcount and concentrating resources on the U.S. market and prediction markets. It continues operations in Singapore.

Former CFTC Chair Timothy Massad described the agency’s attempt to reverse a settled enforcement action as extraordinarily unusual and said the public deserved a fuller explanation of the decision to seek withdrawal.

The court’s decision means the original terms of the January 2025 settlement continue to bind the parties despite the regulator’s subsequent change of position.