Crypto exchange Gemini has publicly accused the U.S. Commodity Futures Trading Commission (CFTC) of engaging in "lawfare" — a misuse of legal processes for personal or political gain — in a protracted legal dispute concerning its 2017 Bitcoin futures launch. The dispute, spanning approximately seven years, culminated in Gemini’s settlement with the CFTC earlier in 2025 for $5 million without admission of wrongdoing.
Gemini’s lawyer, Jack Baughman, in a letter to the CFTC’s Inspector General, claimed that the enforcement division built its case on "fraudulent whistleblower evidence" from Benjamin Small, Gemini’s former COO. Small had filed a whistleblower complaint alleging the exchange misled regulators on its Bitcoin auction process, integral to the Bitcoin futures product co-launched with Cboe. Gemini alleges Small acted out of revenge after being fired for gross negligence tied to a rebate fraud scheme that incurred over $7 million in losses, involving third-party companies.
Baughman described the lengthy investigation as "abusive" and accused the CFTC enforcement staff of pursuing the case primarily to secure high-profile career advancements, rather than genuine market protection. The letter highlighted failures by the agency to scrutinize Small’s credibility—later discredited in arbitration—and to address actual fraudulent activities by traders. Moreover, prosecutors declined to press charges, and Gemini’s Bitcoin futures operated without incident for 19 months before being shelved due to unrelated regulatory uncertainty.
Gemini’s correspondence draws from CFTC Commissioner Caroline Pham’s 2024 reform blueprint criticizing the agency’s "regulation-by-enforcement" approach. Gemini supports calls for reform, emphasizing the regulatory and economic harms caused by the drawn-out investigation and the misuse of public resources.
This situation underscores tensions between crypto industry participants and regulatory bodies and spotlights demands for greater oversight transparency and accountability within the CFTC.