The U.S. Commodity Futures Trading Commission (CFTC) has asked a federal court in New York to overturn a consent order against cryptocurrency trading platform Gemini Trust. The order previously included a $5 million civil penalty and a continuing injunction prohibiting the company from making false statements to regulators.
The case originated from a statement made in 2017.
This case relates to information Gemini submitted to the CFTC in the latter half of 2017 regarding a Bitcoin futures contract. A court order that took effect in January 2025 found the company guilty of making false statements on the matter, and therefore imposed a fine and an injunction.
The order was issued during the final stages of the Biden administration's term. Now, the CFTC is led by officials appointed by Trump, and the direction of case handling has changed.
The CFTC stated that it will not initiate a case under current standards.
The CFTC said Wednesday that after a “full review” of the investigation, the agency believes the complaint should not have been filed and would not have been initiated under current enforcement standards.
The agency argues that continuing to enforce the forward-looking provisions of the consent order is neither in line with the CFTC's mission nor in the public interest. Therefore, the CFTC and Gemini are jointly requesting the court to overturn the parts that are still in effect.
The former chairman said this move was very rare.
Former CFTC Chairman Tim Massad told CNBC that it is “very rare” for a regulator to proactively request the revocation of a court order it had pushed through. He also stated that, based on his experience during his tenure, law enforcement typically only pursues cases with strong factual and legal foundations.
Gemini's lawyer, Avi Perry, stated that the case should never have been brought up in the first place, and that the CFTC's current involvement in the withdrawal request is a correction of a previous mistake.
Additional information:According to the CFTC, the non-forward-looking provisions in the consent order, such as the $5 million fine, have already been paid; the application primarily targets the still-in effect of the injunction, so even if the court approves the revocation, the fines already paid will not be refunded.
