Gemini: The Exchange and Its Regulator Both Asked a Judge to Undo a $5M Deal. He Said No

On 15 October 2026, in an eight-page order, Judge Alvin K. Hellerstein of the US District Court in Manhattan turned down a request that courts almost never see. The request came from both sides of a finished lawsuit at once. The Commodity Futures Trading Commission (CFTC), the US regulator for futures markets, and Gemini Trust Company, the crypto exchange founded by Cameron and Tyler Winklevoss, had jointly asked him to wipe out the settlement that ended the CFTC's own case against Gemini.

The judge said no. "Gemini's receipt of additional materials after the fact may have caused it to regret that it settled," he wrote, "but it did not create a post-judgment change in factual circumstances making continued application of the Consent Order inequitable."

The money was never really in play. Gemini paid a $5 million civil penalty under the January 2025 deal, and the parties had told the court it would not be refunded even if the deal were undone. What both sides wanted gone were the parts that last forever: a permanent court ban on Gemini making false or misleading statements to the CFTC, and Gemini's promise never to publicly deny the findings against it. Those stay.

The case: a bitcoin futures contract and four claims

The story starts in 2017. A futures contract is an agreement to buy or sell something at a fixed price on a future date, the same tool farmers and oil traders have used for a century. That year Gemini wanted bitcoin futures to exist, and it wanted the final price of those contracts to be set by an auction on its own exchange. Cboe Futures Exchange, part of the Chicago-based market operator Cboe Global Markets, launched bitcoin futures on 10 December 2017, settled against the Gemini auction price. Cboe stopped listing new contracts in 2019.

US futures markets can certify their own new contracts, but the law bars listing one that is "readily susceptible to manipulation", in the words of the court record. Because the price came from Gemini's auction, CFTC staff had to rely on what Gemini told them about how that auction worked.

On 2 June 2022 the CFTC sued, saying those answers were false or misleading. The consent order Gemini later signed lists four subjects. Gemini said its exchange was "fully (pre-)funded", meaning traders had to have the money in their accounts before they bid, like buying shares with cash and no margin. It did not disclose that some customers traded with loans from a Gemini affiliate or with "advances" and "credits" from a Gemini employee. It said self-trading, an account buying from itself to make the market look busier, was "prohibited" and blocked by its systems, without disclosing that no such block existed before about May 2017 and that self-trading continued after it was added. It described a uniform, published rebate scheme for market makers, the professional traders paid to keep a market liquid, without disclosing special fee deals that two customers used for fraudulent or collusive trading. And it handed over trading-volume figures that included all of the above.

Gemini fought for about three years. The case went through discovery and summary judgment, the stage where a judge decides whether there is anything left to try. Then, by Gemini's own account quoted in the new order, it agreed to settle on 24 December 2024, fewer than three weeks before trial. The judge entered the consent order on 6 January 2025. Gemini neither admitted nor denied the allegations, but agreed not to deny them in public.

Why a regulator would ask to undo its own win

Two weeks later Donald Trump returned to the White House. On 23 January 2025 he signed Executive Order 14178, which told agencies to support "the responsible growth and use of digital assets". The Winklevoss twins had each given $1 million to his 2024 campaign, according to Cointelegraph. In September 2025 Brian Quintenz, then Trump's nominee to chair the CFTC, published text messages in which Tyler Winklevoss raised the Gemini litigation with him. Trump withdrew the nomination. Bloomberg Law reported that Tyler Winklevoss played a role in sinking it. Michael Selig was later confirmed as chairman and is the commission's only sitting member.

In June 2025 Gemini had complained to the CFTC's inspector general, the agency's internal watchdog, about what it called an "abusive investigation and lawfare", according to The Block. Through public records requests Gemini obtained internal agency papers it says it was refused during the lawsuit.

On 28 May 2026 the CFTC changed sides. Its joint motion with Gemini said the complaint "should not have been filed" and would not have been under current standards. It said the agency's Division of Enforcement had used inappropriate tactics: relying on a whistleblower it had reason to doubt, applying regulatory pressure to force a settlement, and using a legal privilege to keep evidence from Gemini. Cointelegraph reported that the motion identified the whistleblower as Gemini's former chief operating officer. None of these claims has been tested in court.

A regulator cannot simply tear up a court order it no longer likes. A consent order is a judgment of the court, not a private contract, so only the judge can undo it. That is why the CFTC needed Hellerstein. Gemini had a clearer motive. It listed its shares on Nasdaq in September 2025, and it now runs CFTC-licensed derivatives businesses, including prediction markets. A standing court finding that it misled its own regulator, plus a gag on disputing it, is a permanent mark on its record.

Tim Massad, who chaired the CFTC under President Barack Obama, called the reversal "extraordinarily unusual" in May. "I know of nothing like this happening before," he told Cointelegraph, "and I think the public deserves a better explanation."

What the judge said

The motion relied on Rule 60 of the Federal Rules of Civil Procedure, which lets a court reopen a final judgment in narrow cases, such as when keeping it in force is "no longer equitable" because the facts or the law have changed. Hellerstein found that nothing had changed except what the parties knew. "Newly acquired knowledge of facts that existed at the time the Consent Order was entered does not constitute a significant change in factual circumstances," he wrote.

He said Gemini had known since August 2017 that it was, in its own words, "the victim of a sophisticated fraud scheme enabled by its own Chief Operating Officer", and knew the officer had threatened to interfere with the CFTC's review. Gemini was represented by lawyers, had fought "vigorously" for more than three years and had signed a statement that it agreed to the order voluntarily. Quoting a 1950 Supreme Court case, he called the settlement a "free, calculated, [and] deliberate choice", and such choices "are not to be relieved from."

On the policy change he was blunt. A new executive order, a Justice Department memo titled "Ending Regulation by Prosecution" and a new enforcement approach were "a change in enforcement priorities and policies, not a 'significant change ... in law.'" He cited a 1994 case rejecting a new administration that found it "no longer convenient to live with the terms of the consent decree".

The misconduct claims had a timing problem too. Rule 60 has separate clauses for new evidence and for misconduct by the other side, and both must be used within one year of the judgment. The judgment was entered in January 2025. The motion came 16 months later. The parties could not use the catch-all clause to get around that deadline, the judge said.

"The CFTC's present assessment that this action should not have been brought does not require vacatur or other relief," he concluded. The agency is free, he added, to take its current policies into account when deciding whether to enforce the order at all.