Judge Rejects Gemini and CFTC’s Bid to Undo $5M Settlement and Permanent Injunction

A federal judge has refused to undo the Gemini CFTC settlement, keeping the Winklevoss-led exchange bound by a permanent injunction and a $5 million civil monetary penalty.

U.S. District Judge Alvin K. Hellerstein, of the Southern District of New York, issued the ruling on October 15, 2026.

He denied a joint motion by Gemini Trust Company and the CFTC to vacate the consent order entered in January 2025.

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Policy Shift Arguments Fall Short Under Rule 60

Under the new administration, enforcement priorities shifted. An internal CFTC review later concluded that the original complaint should not have been filed.

The agency also labeled Gemini a “fraud victim” in related matters. On that basis, the CFTC joined Gemini in May 2026 to seek relief from the judgment.

CoinGape reported at the time that the US CFTC joined the Winklevoss twins’ Gemini to withdraw the $5M penalty.

That joint motion argued that post-settlement evidence and policy changes made continued enforcement inequitable.

The case dates to 2017, when Gemini made statements to the CFTC during a Bitcoin futures self-certification review. The CFTC alleged those statements were false or misleading.

It filed a formal complaint in June 2022. Gemini called the prosecution overreach. In fact, as CoinGape reported, Gemini filed a complaint alleging “lawfare” in the 2022 lawsuit, framing the enforcement as politically motivated.

Roughly three weeks before a scheduled trial, Gemini agreed to settle. The Gemini CFTC settlement was entered in January 2025 under the outgoing Biden administration.

Gemini neither admitted nor denied the allegations. The $5 million penalty was paid in full at that time.

CoinGape covered those terms when they emerged, Gemini Trust Ends CFTC Dispute With $5 Million Settlement.

Judge Hellerstein was unconvinced. He ruled that arguments around whistleblower credibility, litigation tactics, and broader digital asset policy changes do not meet the strict standard under Federal Rule of Civil Procedure 60.

That rule governs when a court can reopen a final judgment. The judge held that post-settlement materials do not create the required change in factual circumstances. The permanent injunction therefore remains in force.

This broader regulatory environment matters. The Biden era was marked by what critics described as systematic pressure on the crypto industry.

As CoinGape documented, Operation Chokepoint confirmed crypto sector debanking under the Biden administration.

Gemini and others have since argued that such enforcement actions were part of that broader campaign. The court’s ruling signals that historical settlements carry legal weight regardless of what regulators believe in hindsight.

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What This Means for Gemini’s Regulatory Expansion

Despite the ruling, Gemini has continued building its regulated business. The exchange bagged a major CFTC license for derivatives trading and has pursued both a Derivatives Clearing Organization and a Designated Contract Market license.

Most recently, Gemini partnered with Apex Fintech to expand CFTC-regulated prediction markets, a fast-growing area of its business.

The persistence of the Gemini CFTC settlement creates a compliance overhang. Gemini remains bound by a permanent injunction on statements it makes to the CFTC.

That matters as the exchange pursues new product approvals and licensing discussions.

Investors and analysts tracking regulated crypto firms should note the distinction: forward-looking regulatory easing is not the same as clearing a court-entered record.

The broader crypto regulatory picture is shifting fast. As CoinGape noted, the SEC and CFTC have made nine moves to write crypto rules without waiting for Congress.

And the CFTC has proposed new rules to assert jurisdiction over prediction markets, the exact space Gemini is expanding into.

The court’s denial of the vacatur bid adds one more variable to a complex regulatory calculus for the Gemini CFTC settlement story.