Judge keeps Gemini’s $5 million CFTC settlement in place

A federal judge has rejected Gemini and the Commodity Futures Trading Commission’s joint bid to undo their 2025 settlement, leaving the exchange’s $5 million penalty paid and its permanent injunction in place. The ruling blocks the parties’ effort to remove the order’s continuing restrictions even after the regulator said it would not have brought the case under its current enforcement standards. The Block reported the decision and the court’s reasoning.

US District Judge Alvin Hellerstein of the Southern District of New York ruled on Thursday that the arguments did not justify reopening the judgment. The case began in June 2022, when the CFTC sued Gemini over statements allegedly made during the agency’s review of a proposed bitcoin futures contract. A consent order resolved the case in January 2025, three weeks before trial was due to begin. Gemini paid the penalty and agreed to a permanent injunction against false or misleading statements or omissions to the CFTC.

Why did the CFTC and Gemini seek to reopen the order?

The CFTC joined Gemini’s request in May 2026 after reviewing the investigation and its handling. In its announcement of the joint motion, the agency said it concluded the complaint should not have been filed and would not have been brought under current standards. It cited concerns about the whistleblower account, the strength of the evidence, and litigation tactics. Those were the agency’s findings and arguments for relief, not new findings in the judge’s ruling.

The parties asked to remove the order’s prospective provisions, including the injunction; the $5 million penalty had already been paid, and they agreed it would not be returned. That distinction set a narrower practical goal than a full reversal of the financial outcome: Gemini would remain out the money, but the injunction would no longer govern its future statements to the regulator.

Why did the judge leave the injunction in place?

Hellerstein concluded that the parties had not shown the kind of change that warrants relief from a final judgment. As The Block reported, he said the facts raised in the motion were available before the settlement, so the agency’s later reassessment did not amount to a significant change in circumstances. A shift in enforcement priorities also did not, by itself, require vacating the order.

The judge also rejected the claim that regulatory pressure made Gemini’s consent involuntary. The exchange had litigated the case for roughly three years, was aware of the relevant internal issues, and chose to settle shortly before trial, according to the court’s reasoning reported by The Block. The ruling thus leaves the original resolution intact despite both parties now wanting a different prospective result.

What remains at stake after the ruling?

The immediate outcome is continuity: the penalty stays paid, and the injunction remains. The ruling does not resolve the underlying allegations through a trial; the case ended in a consent order. It also does not erase the CFTC’s criticism of its own earlier enforcement process. Instead, it draws a line between a regulator’s changed view of a case and the legal standard for reopening a judgment already entered.

The next signals are whether Gemini or the CFTC seek further court review, and how the agency applies its stated standards in future digital-asset cases. For exchanges, the decision shows the trade-off in a settlement: it can end costly litigation before trial, while its terms may remain binding even if the regulator later changes course. For the CFTC, changing enforcement policy can shape future cases, but this ruling leaves the existing order in force.

Sources and documents

• reported the decision and the court’s reasoning — theblock.co
• announcement of the joint motion — cftc.gov