On October 15, 2026, U.S. District Judge Alvin K. Hellerstein denied a joint motion by Gemini Trust Company and the CFTC to vacate a January 2025 consent order requiring a $5 million penalty and permanent injunction. Despite an internal CFTC review determining the 2022 lawsuit over 2017 Bitcoin futures statements was flawed, the court ruled that shifting regulatory priorities and pre-existing facts do not justify undoing a settled judicial judgment under Rule 60.
Background of the CFTC lawsuit and settlement
- ▪The January 2025 consent order between Gemini Trust Company and the CFTC imposed a $5 million civil monetary penalty and a permanent injunction barring Gemini from making false or misleading statements to the CFTC, following the 2022 Bitcoin futures lawsuit
- ▪Gemini Trust Company agreed to settle the CFTC enforcement action in January 2025, three weeks before the case was scheduled to go to trial after roughly three years of litigation
- ▪Gemini Trust Company had already paid the $5 million civil monetary penalty imposed by the January 2025 consent order, and sought no refund in the May 2026 joint vacatur motion
- ▪The CFTC filed a lawsuit in 2022 alleging Gemini Trust Company made false or misleading statements of material fact in 2017 regarding a Bitcoin futures contract relying on Gemini auction prices
CFTC arguments to vacate the order
- ▪The CFTC stated in its May 2026 vacatur filing that the Biden-administration enforcement action would not have been brought under President Donald Trump's administration and involved inappropriate litigation tactics
- ▪An internal CFTC review concluded the agency should not have filed the 2022 complaint against Gemini Trust Company over 2017 Bitcoin futures statements due to an uncredible whistleblower and a shift in enforcement priorities
Judge Hellerstein's grounds for denial
- ▪Judge Alvin K. Hellerstein ruled under Federal Rule of Civil Procedure 60 that newly acquired knowledge of facts existing when the January 2025 consent order was entered does not constitute a significant change in factual circumstances
- ▪Judge Alvin K. Hellerstein ruled that the CFTC's reassessment of its enforcement priorities does not require vacatur because court judgments belong to the judiciary rather than the agency
- ▪Judge Alvin K. Hellerstein rejected Gemini's claims of regulatory pressure, holding that litigating for three years before making a calculated decision to settle shortly before trial does not render Gemini's consent to settle involuntary
Court decision and remaining restrictions
- ▪U.S. District Judge Alvin K. Hellerstein of the Southern District of New York denied a joint motion from Gemini Trust Company and the CFTC to vacate a January 2025 consent order on October 15, 2026
- ▪The October 15, 2026 court ruling leaves the permanent injunction and restrictions prohibiting Gemini Trust Company from publicly denying the 2022 CFTC case's findings in place
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