BREAKING: US Judge Refuses to Undo Gemini's $5 Million CFTC Settlement — Even the Regulator Wanted It Gone

A US federal judge in New York has refused to cancel the $5 million settlement between crypto exchange Gemini and the Commodity Futures Trading Commission (CFTC). The unusual part is that both sides asked for the deal to be undone together — and the court still said no on Thursday.

The settlement dates back to January 2025 and closed a CFTC lawsuit first filed in 2022. Regulators said Gemini gave misleading information during the review of a proposed Bitcoin futures product that relied on the exchange's own Bitcoin auction. The consent order said the exchange had not disclosed that some customers traded with borrowed funds, that self-trading took place despite safeguards, and that some traders received special fee deals.

In May this year, the CFTC and Gemini jointly asked the court to throw the settlement out. An internal CFTC review had criticised how its enforcement team built the case, including questions about a whistleblower, and the agency said it would not bring the same case under its current enforcement priorities. Gemini argued it had settled under heavy regulatory pressure.

Judge Alvin Hellerstein was not convinced. He noted that Gemini chose to settle voluntarily only about three weeks before a trial was due to start, and that the exchange already knew about weaknesses in the case at that time. In his view, a change in enforcement policy is not the same as a change in law, and the strict test for reopening a final judgment was not met. The $5 million penalty has already been paid and will not be refunded, and a permanent ban on making false or misleading statements to the CFTC stays in force.

For traders, the message is clear: friendlier regulation does not automatically erase old cases. Exchanges that settled in earlier years may still have to live with those deals, even when the regulator itself has changed its mind. That keeps compliance risk on the table for big US platforms, and it is a reminder that court orders move much more slowly than crypto policy headlines.

Read also: BREAKING: $13 Trillion Giant Charles Schwab Opens Bitcoin and Ethereum Trading to All Clients — Three More Coins Coming This Year

This post is news only, not financial advice. Always do your own research before buying or selling crypto.

Sources: Cointelegraph, The Block, CoinDesk