Gemini settlement remains in force after U.S. judge denies CFTC bid

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Gemini settlement ruling

Highlights

Judge Alvin Hellerstein denied Gemini and CFTC's joint motion to vacate the January 2025 consent order, keeping the settlement in force.
Gemini's $5 million civil penalty and permanent bar from misleading CFTC statements remain unchanged after the court found no grounds for post-judgment relief.
The ruling signals courts may enforce completed enforcement settlements regardless of later regulatory policy changes or joint requests to reverse them.

Court rejects effort to reopen 2025 order

As reported by The Block, Judge Alvin Hellerstein of the Southern District of New York denies a joint motion from Gemini and the Commodity Futures Trading Commission to vacate the January 2025 consent order, saying the parties do not present sufficient grounds to reopen the judgment.

The order resolved a 2022 CFTC lawsuit alleging Gemini made false or misleading statements of material fact to agency staff during the review of a proposed bitcoin futures contract. Entered three weeks before trial was due to begin, the settlement requires Gemini to pay a $5 million civil monetary penalty, which the exchange has already paid, and permanently bars it from making false or misleading statements or omissions to the CFTC.

On May 28, 2026, the two sides jointly filed their motion to vacate. The CFTC says it should not have brought the complaint and that the case would not have been pursued under its renewed enforcement priorities, while Gemini argues it settled under coercive regulatory pressure.

Judge Hellerstein says those arguments do not amount to post-judgment developments that justify undoing the order. The court says newly acquired knowledge of facts that existed when the consent order was entered does not constitute a significant change in factual circumstances, and adds that the CFTC's current assessment of the case does not require vacatur or other relief.

Implications for crypto enforcement and settlements

The judge also rejects Gemini's claim that regulatory pressure made its consent involuntary. He says the exchange litigated the case for roughly three years, knew of relevant internal issues, including a fraud scheme involving its former chief operating officer, and ultimately made a calculated decision to settle shortly before trial.

The decision leaves intact both the financial penalty and the permanent injunction, underscoring that later policy shifts at a regulator may not be enough to unwind completed enforcement settlements. For crypto firms facing U.S. oversight, the ruling signals that courts can treat negotiated resolutions as final even when both sides later seek to reverse them.

The Block says it has reached out to Gemini and the CFTC for comment.

Our earlier report on the ACCC’s Federal Court action against Kmart detailed allegations that the retailer breached Australian Consumer Law and product safety rules across several items, including nail glue, button-battery watches and Smart Tags. It outlined claims of inadequate burn warnings, failures to lodge mandatory serious injury reports, and alleged non-compliance with button-battery testing and information requirements—issues that underscore how regulators can pursue court proceedings over safety and disclosure obligations.

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