The U.S. Commodity Futures Trading Commission (CFTC) has taken the rare step of asking a federal court to void its own $5 million settlement with cryptocurrency exchange Gemini, signaling a dramatic shift in regulatory philosophy under the Trump administration. The motion, filed on Wednesday evening, seeks to vacate the January 2025 consent order that resolved allegations Gemini made false or misleading statements about the difficulty of manipulating Bitcoin futures contracts.
The CFTC’s request follows a thorough reexamination of the case, including the investigation’s history, the evidence relied upon, and the decision to file charges. Based on that review, the agency now contends the complaint should never have been brought and would not be filed under its current enforcement approach. In a public release, the regulator cited several reasons: the case leaned heavily on a whistleblower account it now deems lacking credibility; the investigation improperly targeted Gemini—described as a fraud victim—rather than the actual fraudsters; and there were serious questions about the strength of the evidence.
The original lawsuit, filed in 2022, was settled during the final weeks of President Joe Biden’s administration with Gemini agreeing to pay a $5 million penalty and abide by an injunction against future misstatements. Now, the CFTC under Chairman Mike Selig—a Trump appointee known for his pro-crypto stance—has concluded that enforcing the consent order’s prospective provisions no longer serves the regulator’s mission or the public interest. The monetary penalty has already been satisfied, and the agency argues that keeping the remaining injunction in place would be inequitable.
Legal experts note such a reversal is highly unusual and underscores the impact of political leadership on regulatory enforcement. The move aligns with a broader trend within the second Trump administration to reassess and roll back aggressive actions against the crypto industry. If the court grants the motion, Gemini will not have to pay the fine, and the case will be treated as though it never happened. The decision could embolden other crypto firms under investigation and may pressure other bodies like the SEC to reconsider their stances.
The CFTC also alleged that personnel improperly influenced the agency’s regulatory authority to create settlement leverage. This admission further highlights the internal policy pivot. The court’s ruling will be closely watched as a bellwether for the future of crypto regulation in the United States.
