The U.S. derivatives regulator has requested that a judge overturn one of its cryptocurrency enforcement victories. The Commodity Futures Trading Commission (CFTC) has collaborated with Gemini Trust on a motion to vacate a consent order issued against the exchange in early 2025.
Why The CFTC Says The Case Should Go
In a fresh filing, the CFTC told the court that, after an internal review, it determined that the original complaint against Gemini “should not have been filed” and “would not have been” filed under its current enforcement criteria. The 2022 complaint accused Gemini of making false and misleading statements while the agency was reviewing a proposed Bitcoin futures contract, citing activity on the exchange in 2017.
The parties settled in January 2025 through a consent order that imposed a $5 million civil penalty and a permanent injunction prohibiting Gemini from making future false statements to the CFTC. However, the regulator now says its investigation relied heavily on a whistleblower “known to be lacking in credibility” and targeted Gemini, which it now describes as a fraud victim, instead of focusing on the alleged fraudsters.
Because of those findings, the CFTC argues that keeping the forward‑looking parts of the order in place “serves neither the CFTC’s mission nor the public interest.” It has therefore joined Gemini in asking the Southern District of New York to vacate the consent order’s prospective provisions, including the injunction, while noting that Gemini has already paid the 5 million dollar penalty and met the non-prospective terms.
New Enforcement Standards Behind The Shift
The change comes as the CFTC is undergoing a comprehensive revamp of its approach to digital asset investigations and settlements. In late 2025, the agency revised its norms of procedure to provide targets for more thorough “Wells” letters, stretch response timelines, and require written memos in full before staff recommends settlements.
Leaders also advocated a “back-to-basics” approach that addresses fraud and manipulation that cause demonstrable customer harm and seeks to prevent what detractors call “regulation by enforcement.”
In the Gemini filing, the CFTC cites those updated standards and says the case no longer aligns with how it believes digital-asset enforcement should work. It says the request to vacate does not mean it will stop pursuing crypto misconduct, but that it wants to focus on clear frauds and craft settlements that “accurately reflect” both the facts and its current policy.
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