Judge keeps Gemini’s $5 million CFTC order in force

A federal judge in Manhattan denied a joint request by the Commodity Futures Trading Commission (CFTC) and Gemini Trust Company to vacate their January 2025 consent order, leaving its $5 million penalty and permanent injunction in force. In the October 15 court order, U.S. District Judge Alvin Hellerstein found that the parties had not shown grounds for relief under Federal Rule of Civil Procedure 60(b). Gemini had already paid the penalty; the parties’ motion said they did not seek its return.

The order ends an unusual joint effort by a regulator and the company it had sued to unwind a judgment. The CFTC said a review of the case led it to conclude that the complaint should not have been brought under its current enforcement standards. Hellerstein ruled that the agency’s changed assessment and its arguments about facts known before settlement did not meet Rule 60’s requirements.

What did the 2025 consent order require Gemini to do?

The consent order resolved the CFTC’s 2022 lawsuit, which alleged that Gemini made false or misleading statements or omissions during the agency’s review of a proposed bitcoin futures contract. Entered on January 6, 2025, it required Gemini to pay a $5 million civil monetary penalty and permanently enjoined it from making false or misleading statements or omissions to the CFTC. Reuters reported that the settlement came three weeks before trial was scheduled to begin.

The order did not amount to an admission of the allegations: Gemini agreed to settle without admitting or denying liability, according to the consent order described in the parties’ motion. The injunction, however, is prospective. It continues to govern Gemini’s statements to the regulator unless a court modifies or vacates it.

Why did the parties ask the court to reopen the judgment?

In May 2026, the CFTC and Gemini jointly sought relief under Rule 60(b)(5) and, alternatively, Rule 60(b)(6). Rule 60(b)(5) allows relief when applying a judgment prospectively is no longer equitable; the parties argued that policy changes and the CFTC’s review of the investigation justified that outcome. Under Rule 60(b)(6), they also sought relief based on what they described as extraordinary circumstances, including alleged inappropriate enforcement tactics.

The CFTC’s position had shifted: it said its review raised concerns about the evidence, the charging decision and the conduct of the litigation, and that it would not have filed the complaint under current standards. Those were the agency’s conclusions, not findings in the October ruling. The motion proposed vacating the order or, at minimum, its prospective provisions. The parties agreed that vacating it would not return Gemini’s penalty.

Why did Hellerstein deny relief under Rule 60(b)?

Hellerstein found that the parties had not established a qualifying post-judgment change in facts or law. Newly acquired knowledge about facts that existed when the consent order was entered did not, in his analysis, amount to a significant change in circumstances. The CFTC’s current view that the case should not have been brought also did not require vacatur.

The judge rejected Gemini’s claim that regulatory pressure made its consent involuntary. As Reuters reported, Hellerstein noted that Gemini had litigated the case for more than three years before settling voluntarily. The court treated the settlement as a calculated choice made shortly before trial, not as a basis to reopen the judgment. Rule 60(b)(6), the alternative request, did not supply sufficient grounds either.

The result is limited to this judgment: the paid penalty stays paid, and the injunction remains in force. The ruling does not decide whether the CFTC would bring a similar case under its current enforcement approach. For Gemini, the practical consequence is that the agency’s changed assessment did not itself erase the prospective terms of a court-entered consent order.

References

• October 15 court order — storage.courtlistener.com