CFTC Seeks to Revoke Settlement Agreement with Gemini, Alleging Original Lawsuit Was Based on Unreliable Whistleblower Tips

[NEW YORK, May 28] — The U.S. Commodity Futures Trading Commission (CFTC) on May 28 asked a federal court to vacate its $5 million settlement with cryptocurrency exchange Gemini, arguing the original enforcement action against the platform was built on flawed allegations. In a Wednesday filing, the CFTC teamed up with Gemini to move to dismiss the settlement. Following an internal review, the agency determined that the enforcement action brought during the Biden administration “should not have been brought—and would not be brought under current enforcement standards.” The CFTC pointed to its reliance on a whistleblower deemed “known unreliable” as a core issue, adding that the settlement’s ongoing forward-looking obligations no longer align with the agency’s mission or the public interest. The dispute stems from 2022 CFTC claims that Gemini made misleading statements about the trading volume and liquidity of Bitcoin futures contracts. Now, the regulator says the whistleblower’s accusations were rooted in information from Gemini’s former chief operating officer—who is alleged to have threatened Gemini’s co-founders, the Winklevoss brothers, and had a history of distorting facts. The CFTC also noted Gemini itself was a fraud victim: two customers defrauded the exchange out of $7.5 million via a coordinated rebate scam that the platform’s former leadership failed to address. Gemini paid the $5 million fine in January 2025, though it remains unclear if that sum will be refunded. The motion to dismiss follows a pattern of crypto-related suits being dropped by the CFTC and SEC during the current administration, echoing similar steps taken by regulators during the Trump era. Notably, the Winklevoss brothers each donated $1 million to former President Trump’s 2024 presidential campaign. Current CFTC Chairman Mike Selig, a former crypto industry attorney, has expressed support for the sector, and the Wednesday motion aims to terminate Gemini’s remaining obligations under the settlement—including a prohibition on making false or misleading statements to the CFTC.