CFTC Says Gemini Enforcement Complaint Should Not Have Been Filed

CFTC Says Gemini Enforcement Complaint Should Not Have Been Filed as Regulator Seeks Relief From 2025 Consent Order, Citing Evidence Concerns and Broader Shift in US Crypto Enforcement Standards

The US Commodity Futures Trading Commission (CFTC) has filed a motion in the long-running action against crypto exchange Gemini, asking for relief from a previous judgment, arguing that the original complaint against Gemini should not have been filed under current standards.

The joint motion was filed in the US District Court for the Southern District of New York and asks the court to lift an order granted in January 2025. The CFTC filed the case in June 2022 and the case was settled by Gemini for a $5 million fine.

The CFTC said it conducted a “comprehensive review” of the investigation and evidence and charging decisions and litigation conduct. The review also reflected on the updates of digital-asset policy and enforcement within agencies.

“As a result, the CFTC concluded the complaint should not have been filed and would not have been under current enforcement standards,” the agency said.

CFTC Questions Evidence Used Against Gemini

Its review determined that the complaint was “largely based on an account by a whistleblower, which it was aware was not credible,” the regulator said. It also threw up “serious questions” over the level of evidence.

Rather than seeking out alleged fraudsters, investigators have been pursuing the CFTC’s “fraud victim” Gemini, which allegedly made false statements in connection with its registration application process.

According to the agency, the review also found concerns that evidence requested by a Commissioner may have been withheld during the vote on the complaint. Later, it was argued that litigation conduct prevented Gemini from obtaining evidence needed for its defense.

Joint Motion Seeks to Remove Remaining Provisions

The CFTC and Gemini have requested under Fed.R.Civ.P. Rule 60(b) that the court provide them relief. The parties want to set aside the rest of the proposed provisions in the consent order.

According to the filing, the parties are seeking to vacate the consent order’s prospective provisions, arguing that continued enforcement of the remaining injunctive provisions “serves neither the CFTC’s mission nor the public interest.”

Non-prospective portions of the consent order, such as civil monetary penalties, have already been complied with, the filing said. 

Also Read: CFTC Uses AI to Speed Up Crypto Registration in Seconds, Solves Staff Shortage Crisis

Broader Shift in Crypto Enforcement

The case is a testament to a broader shift in digital-asset enforcement. CFTC Chairman Mike Selig has become more crypto-friendly since the Trump administration came to office after the Gemini settlement.President Donald Trump has been supportive of the crypto sector, which was on display on his social media platform, Truth Social, where he said, “The new Frontier of Finance is being Built in America, and ‘TRUMP’ will NEVER let Crypto down!”