CFTC and Gemini Jointly Move to Vacate $5 Million Consent Order

The Commodity Futures Trading Commission and Gemini Trust Company, LLC filed a Joint Motion asking the Southern District of New York to vacate a 2025 Consent Order that had imposed a $5 million civil monetary penalty and permanent injunction against the cryptocurrency exchange.

The Joint Motion represents the latest turn in the three-year litigation stemming from allegations that Gemini made false or misleading statements to CFTC staff during the 2017 pre-certification review of Cboe's Bitcoin futures contract. In the filing, the CFTC conceded that its Division of Enforcement engaged in conduct falling "short of the standards expected of any litigant, much less a federal agency," and that the Complaint would not have been filed under the agency's current enforcement standards.

The parties argued that under Federal Rules of Civil Procedure Rule 60(b)(5) ("Relief from a Judgment or Order") applying the Consent Order's remaining prospective provisions — including a gag order barring Gemini from denying the allegations, an admissibility provision, and a permanent injunction — is no longer equitable given material changes in law and policy following President Trump's 2025 Executive Order on digital assets and the DOJ's subsequent "Ending Regulation by Prosecution" directive. Second, the parties asserted that FOIA disclosures obtained by Gemini revealed that DOE built its case substantially on a whistleblower its own attorneys privately acknowledged was a "liar," withheld key underlying documents from CFTC commissioners before the split vote authorizing the Complaint, and deliberately stalled approval of a Gemini affiliate's exchange application to manufacture settlement leverage — conduct which they argue constitutes extraordinary circumstances justifying relief under Rule 60(b)(6).

According to the Joint Motion and Memorandum, the disclosed internal records revealed that DOE attorneys internally questioned the strength of their scienter evidence as early as 2022, with one senior attorney describing it as a "shitty factual case." Meanwhile, officials within CFTC's Division of Market Oversight — the Division whose review process was at the center of the case — complained internally that the manufactured delay of Gemini's exchange application was "OUTRAGEOUS" and that they were being asked to "lie" about the reasons for the delay. The parties contend that Gemini's settlement, reached just weeks before trial, was not a free and voluntary choice but the product of regulatory coercion, and that the Consent Order, therefore, lacks the equitable legitimacy that warrants finality.

If granted, the CFTC indicated it will move to dismiss the underlying Complaint with prejudice.