UMVA has learned that the Commodity Futures Trading Commission and Gemini Trust Company have jointly petitioned a federal court to dismantle pivotal sections of a 2025 consent order born from a protracted enforcement battle over Bitcoin futures.
The filing, lodged on May 27 in the Southern District of New York, marks a dramatic reversal for the regulator, which now argues that the original case against Gemini should never have proceeded under today’s enforcement standards for digital assets.
According to information obtained by UMVA, the CFTC cites a sweeping executive order that prompted multiple agencies to overhaul their enforcement approaches, fundamentally altering how digital‑asset cases are handled.
After a “comprehensive review of the evidence and charging decision,” the agency concluded that the complaint would not have been filed under its current standards and accused its own enforcement staff of employing “inappropriate tactics” to advance the case.
The dispute traces back to 2022, when regulators challenged Gemini’s statements surrounding the 2017 launch of Bitcoin futures on the Cboe Futures Exchange, scrutinizing prefunding practices, market‑maker rebates, self‑trading controls, and auction volume.
UMVA can exclusively reveal that the CFTC now acknowledges “major weaknesses” in the investigation, noting heavy reliance on a whistleblower whose credibility was questionable and flagging “serious questions about the strength of the evidence against Gemini.”
Internal communications referenced in the motion expose deep skepticism among enforcement lawyers, with one attorney lamenting a lack of confidence and another branding the case “sh*y.”
The filing further alleges that Gemini was defrauded by institutional customers and a former executive through rebate schemes that drained more than $7.5 million from the firm.
This legal pivot arrives amid a broader regulatory shift, as crypto firms grapple with softened stances on prediction markets and digital‑asset reporting while still confronting other enforcement actions.
Gemini continues to push forward with Gemini Titan, a federally compliant prediction‑market platform that has faced regulatory delays; the new motion accuses enforcement lawyers of deliberately stalling a separate Titan application to gain leverage in settlement talks.
The parties settled the original case just before trial in late 2024, with Gemini paying a $5 million civil penalty under the consent order. Now both sides seek to strip remaining restrictions, including injunctive provisions and limits on Gemini’s future public statements.
“Continuing enforcement of the consent order’s prospective provisions serves neither the CFTC’s mission nor the public interest,” the filing asserts, underscoring the agency’s dramatic change of heart.
