A federal judge has declined to undo the $5 million settlement between the U.S. Commodity Futures Trading Commission and crypto exchange Gemini, leaving the penalty and a permanent injunction in place even though the regulator itself asked the court to set them aside.
What the case was about
The dispute began in 2022, when the CFTC sued Gemini over statements the exchange made during a 2017 review of a proposed bitcoin futures contract. The agency alleged that Gemini described its auction as fully prefunded, said self-trading was prohibited, and reported fee rebates and trading volume in ways that omitted material details. In January 2025, weeks before a scheduled trial, the two sides entered a consent order that imposed a $5 million civil penalty — which Gemini has already paid — and a permanent injunction barring the exchange from making false or misleading statements to the agency.
An unusual joint request
What made the case unusual was what happened next. In May 2026, the CFTC joined Gemini in asking the court to vacate the order under Federal Rule of Civil Procedure 60(b). The commission said that under its current enforcement posture the complaint would not be filed today; Gemini separately argued it had settled under coercive regulatory pressure. Both pointed to a January 2025 executive order on digital assets, a Justice Department memorandum, and the agency’s broader policy shift.
Why the judge said no
Judge Alvin K. Hellerstein rejected both arguments in an eight-page order dated October 15, 2026. His central reasoning: the facts the parties relied on existed at the time of the settlement, so learning more about them later did not amount to the “significant change in factual circumstances” the rule requires. A change in enforcement priorities, he wrote, is a change in policy rather than a change in law. Gemini’s decision to settle after roughly three years of litigation, represented by counsel, was in the court’s words a “free, calculated, and deliberate choice” that judges do not lightly unwind. He separately ruled that the parties could not use Rule 60(b)(6)’s catch-all provision to sidestep the one-year time limits that apply to newly discovered evidence or misconduct claims.
What the ruling means
The decision is an early marker for crypto firms hoping to clear older enforcement actions under a new administration. It suggests a regulator’s change of heart is not enough to reopen a final consent order — a party must show a post-judgment change in facts, not merely a shift in agency posture. At the same time, the ruling is narrower than it may appear: it does not revisit the merits of the 2017 statements or decide whether the underlying conduct was wrongful, only whether the settlement can be set aside. The $5 million will not be returned, and the injunction remains in force. The consent order’s underlying finding — that Gemini made statements it reasonably should have known were false or misleading — also stands, and Gemini remains bound by its agreement not to publicly deny those findings.
Adapted from Judge Refuses to Erase Gemini's $5 Million CFTC Settlement.