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XMR$561.01Court Rejects Joint CFTC-Gemini Bid to Void $5M Settlement
Judge Hellerstein (SDNY) denied a joint CFTC-Gemini motion to vacate a $5M consent order over alleged misrepresentations in a bitcoin futures audit.
U.S. District Judge Alvin Hellerstein of the Southern District of New York on October 16, 2026, denied a joint motion by the CFTC and Gemini to vacate a $5 million consent order originally entered in January 2025.
Details
The settlement resolved a 2022 CFTC lawsuit that alleged Gemini made false or misleading statements to commission staff during the review of a proposed bitcoin futures contract. Investigators claimed Gemini failed to disclose that customers traded with borrowed funds, that self-trading occurred, and that certain traders received preferential fee arrangements. Gemini paid $5 million in January 2025 and agreed to permanent injunctions against providing false information to the CFTC.
On May 28, 2026, both parties filed a joint motion to vacate — an unusual step in enforcement law. The CFTC argued it should not have brought the case given its renewed priorities under new leadership. Gemini claimed it had settled under "coercive regulatory pressure." Judge Hellerstein rejected both arguments. The court held that "newly acquired knowledge of facts that existed at the time the Consent Order was entered does not constitute a significant change in factual circumstances," and that "the CFTC's present assessment that this action should not have been brought does not require vacatur." The ruling also noted Gemini had litigated for three years and "made the calculated decision to settle the case shortly before trial."
What It Means for the Market
The ruling signals that federal courts will not automatically unwind regulatory settlements when enforcement agencies change direction. Former CFTC Chair Timothy Massad called the reversal bid "extraordinarily unusual" and said the public "deserves a better explanation." For other exchanges that reached similar agreements with the CFTC or SEC under the previous administration, the decision significantly reduces the prospect of straightforward vacatur — each case will need its own legal challenge on independent grounds.
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