CFTC seeks to vacate $5 million Gemini penalty under revised crypto policy

The US Commodity Futures Trading Commission on Wednesday asked a judge to vacate a $5 million penalty imposed on cryptocurrency exchange Gemini Trust Company, saying the agency should never have brought the case.

The CFTC said Gemini, founded by twin brothers Tyler and Cameron Winklevoss, was wrongly accused of making false statements tied to its bitcoin futures business.

Gemini settled the case in January 2025 during the final weeks of former President Joe Biden’s administration.

Under the settlement, the company paid a $5 million penalty and agreed to an injunction barring it from making false or misleading statements to the CFTC.

However, the CFTC and Gemini have now jointly asked the court to rescind the settlement, citing a shift in the agency’s crypto enforcement policy under President Donald Trump.

Joint filing criticises prior enforcement approach

In court papers filed jointly, Gemini and the CFTC said the agency had resorted to inappropriate tactics to bring the lawsuit and “extract a settlement from Gemini.”

The filing stated that regulators under the Biden administration relied on a whistleblower account that was not credible.

According to the filing, Gemini was instead the victim of fraud involving the company’s former chief operating officer and two customers who allegedly received fraudulent rebates from the exchange.

The CFTC and Gemini said regulators investigated Gemini for allegedly making misleading statements regarding the integrity of its bitcoin futures trading business instead of investigating the fraud claims against the company.

The filing further alleged that regulators used their authority improperly while the case was pending.

According to the court filing, the CFTC told Gemini that it would not receive approval for a new prediction market platform while the enforcement action remained active.

Gemini later received approval for its prediction market product, Gemini Titan, in December 2025.

Questions remain over the refund of the penalty

It was not immediately clear from the filing whether Gemini would receive a refund of the $5 million penalty it already paid as part of the settlement.

Gemini did not immediately respond to requests for comment late Wednesday.

The Winklevoss brothers each donated $1 million in bitcoin to Trump’s 2024 election campaign.

Political backdrop adds attention to the case

The latest development comes amid broader changes in crypto regulation under the Trump administration.

Trump’s initial nominee to lead the CFTC, Brian Quintenz, had accused Tyler Winklevoss last year of lobbying the White House to stall his nomination because of the ongoing CFTC lawsuit against Gemini.

Trump later withdrew Quintenz’s nomination and instead selected Michael Selig to chair the agency.

Tyler and Cameron Winklevoss first gained public attention after suing Mark Zuckerberg, alleging he stole their idea for Facebook.

The twins settled the dispute with Zuckerberg in 2008 for cash and stock.

The latest court filing marks a significant reversal by the CFTC and reflects the agency’s changing approach toward cryptocurrency enforcement under the Trump administration.