US federal judge denies joint Gemini-CFTC bid to undo $5 million settlement

A federal judge in New York denied a joint motion by the Commodity Futures Trading Commission and Gemini (GEMI) seeking to vacate a January 2025 consent order that imposed a $5 million civil penalty and a permanent injunction on the cryptocurrency exchange.

On Thursday, Judge Alvin Hellerstein of the Southern District of New York rejected the joint motion, stating that the parties' arguments do not warrant reopening the judgment. 

The consent order resolved a 2022 CFTC lawsuit alleging that Gemini made false or misleading statements of material fact to agency staff during the review of a proposed bitcoin (BTC) futures contract.

The consent order, entered three weeks before trial was scheduled to begin, required Gemini to pay a $5 million civil monetary penalty, which the exchange had paid. It also permanently enjoined Gemini from making false or misleading statements or omissions to the CFTC.

On May 28, 2026, the two jointly filed a motion to vacate the order. The commission said it should not have filed the complaint, and would not have been under its renewed enforcement priorities. Gemini also argued that it chose to settle under coercive regulatory pressure.

Arguments insufficient

Judge Hellerstein said such arguments were insufficient, writing that facts involved in the original suit were not post-judgment developments but concerned information available before the settlement. 

"Newly acquired knowledge of facts that existed at the time the Consent Order was entered does not constitute a significant change in factual circumstances," the court said. "The CFTC's present assessment that this action should not have been brought does not require vacatur or other relief."

The judge further noted that the claim of Gemini settling under regulatory pressure does not establish that its consent was involuntary, pointing out that the exchange litigated the case for roughly three years and was aware of relevant internal issues including a fraud scheme involving its former chief operating officer. It ultimately "made the calculated decision to settle the case shortly before trial," the court said.

The Block has reached out to Gemini and the CFTC for comment.