On May 27, the U.S. Commodity Futures Trading Commission (CFTC) announced that it, together with Gemini Trust Company LLC, has filed a motion with the court seeking to vacate the prospective provisions of the consent order in the CFTC v. Gemini case. The case was originally filed in June 2022 in the U.S. District Court for the Southern District of New York, and the parties reached a settlement agreement in January 2025.
Six Key Enforcement Issues Confirmed in the CFTC Official Statement
In its review of the statement, the CFTC listed six findings in detail:
First, the complaint mainly relied on testimony from a whistleblower, and the credibility of that whistleblower has been determined to be seriously problematic;
Second, the investigation did not target the alleged fraudster; instead, it pointed to the alleged fraud victim, Gemini, accusing it of making false statements to the CFTC during the registration application process;
Third, there are serious doubts about the strength of the evidence against Gemini;
Fourth, evidence relevant to what the commissioners requested during the vote on the complaint was withheld;
Fifth, the litigation attorneys invoked deliberative-process privilege to object, preventing Gemini from obtaining the evidence needed for its defense;
Sixth, CFTC staff improperly used their regulatory authority to gain leverage in settlement negotiations with Gemini.
Current Legal Action: Scope of the Joint Motion
The CFTC statement confirms that continuing to enforce the remaining prospective provisions of the consent order (including injunctive relief) is neither consistent with the CFTC’s mission nor with the public interest. Accordingly, the parties jointly filed a motion with the court seeking to vacate the effectiveness of the prospective provisions in that consent order; non-prospective provisions (including civil monetary penalties) have already been fulfilled by Gemini under the settlement agreement and are not within the scope of the requested vacatur.
The CFTC statement also noted that the relevant review findings indicate that the federal government needs to revise its enforcement approaches and standards, including in the digital asset space.
Frequently Asked Questions
Does the recognition of these six issues by the CFTC this time amount to a finding of innocence for Gemini?
The CFTC’s official statement finds that the case should not have been brought in the first place; the joint motion seeks to vacate only the prospective provisions of the consent order that were not yet complied with, rather than vacating an already effective judgment or refunding civil monetary penalties that have already been paid. The court has not yet ruled on the joint motion, and whether Gemini can bring further legal claims based on this remains to be confirmed through the judicial process.
What is the background for the CFTC’s comprehensive review this time?
The CFTC statement said that changes in federal digital asset policy led to resolutions of numerous digital asset investigations and cases across multiple government agencies, and this review is part of a broader policy shift. The CFTC also stated that the findings indicate that it is necessary to revise enforcement methods and standards.
Which provisions have been fulfilled, and which provisions are the subject of the motion to vacate this time?
According to the CFTC statement, non-prospective provisions such as civil monetary penalties have already been fulfilled by Gemini under the settlement agreement. The joint motion this time seeks to vacate the still-effective prospective provisions, including injunctive relief. The court has not yet ruled on this motion.
