The CFTC backed Gemini after concluding it would not bring the case under its current standards. Judge Hellerstein found that a change in the agency’s policies did not justify reopening the judgment.
A federal judge in New York denied a joint request by crypto exchange Gemini and the Commodity Futures Trading Commission to set aside their 2025 consent order. In his October 15, 2026 ruling, US District Judge Alvin K. Hellerstein found that changes in the regulator’s enforcement policies and its later assessment of the case did not justify reopening the judgment.
The consent order entered on January 6, 2025 imposed a $5 million civil monetary penalty and a permanent injunction barring Gemini from making false or misleading statements to the CFTC. Gemini has paid the penalty. The parties sought to vacate the entire order or, alternatively, its forward-looking provisions.
The ruling does not impose a new $5 million penalty. It addresses whether the existing judgment should be set aside. In May, the CFTC had already stated that both parties agreed the money paid by Gemini would not be returned.
Why the CFTC backed the exchange
In its May 27, 2026 announcement, the agency said it had reviewed the investigation, evidence and litigation strategy. It concluded that the case relied on a questionable whistleblower, that evidence had been withheld from a commissioner and that regulatory authority had been used to create settlement pressure. The agency said it would not bring the complaint under its current enforcement standards.
Hellerstein found that documents obtained after settlement did not turn pre-existing facts into new events occurring after judgment. His order noted that Gemini knew about some of the underlying problems before settling and still chose to resolve the case shortly before trial. The argument that regulatory pressure had driven the agreement was also insufficient to establish that the company’s consent was involuntary.
The judge pointed to the one-year deadline for motions based on newly discovered evidence or misconduct by an opposing party. He said the alternative procedural provision cited by the parties could not be used to bypass that limit. The administration’s revised approach to digital assets amounted to different enforcement priorities, rather than a significant change in the law, the court found.
The case concerned a bitcoin auction
The lawsuit filed by the CFTC on June 2, 2022 concerned information supplied during its 2017 review of a proposed bitcoin futures contract. The contract would have settled against the price from Gemini’s spot bitcoin auction. How that auction was funded, its trading volume and its protections against manipulation therefore formed part of the regulatory review.
The CFTC’s January 2025 release and the latest court order describe statements about prefunding, safeguards against self-trading, market-maker fee rebates and reported trading volume. Under the consent order, Gemini neither admitted nor denied the allegations but agreed not to deny them publicly.
At the end of his ruling, Hellerstein said the CFTC retains discretion over its enforcement priorities. The regulator can take its current policies into account when deciding whether to seek enforcement of the consent order. The order directs the clerk to close the two motions filed on May 27 and May 28.
