The Commodity Futures Trading Commission (CFTC) asked the courts to drop a Biden-era lawsuit against digital currency exchange Gemini, which stated that the agency had declared “lawfare” against it.
The CFTC joined Gemini Trust Company, LLC in a Motion for Relief from Judgment in CFTC v. Gemini Trust Company, LLC, which was originally filed in the U.S. District Court for the Southern District of New York in June 2022. The parties entered into a consent order in January 2025.
The CFTC stated that it conducted a comprehensive review of the history of the investigation against Gemini, and also considered changes in federal digital asset policy resulting in the resolution of many digital asset investigations and cases across government agencies.
The CFTC concluded that the complaint against Gemini should not have been filed and would not have been filed under its current enforcement standards. The review also found:
- The complaint was based on a whistleblower’s account known to be “lacking in credibility”
- The agency investigated Gemini, which was a fraud victim, for purported false statements during a registration application process instead of focusing on alleged fraudsters
- There were questions about the strength of the evidence against Gemini
- Requested “evidentiary support” was withheld from a commissioner while the CFTC voted on the complaint against Gemini
- The complaint put the CFTC’s internal deliberations at issue, but then litigation counsel invoked the deliberative process privilege to prevent Gemini from obtaining evidence necessary to defend itself
- Personnel improperly influenced the CFTC’s regulatory authority to create settlement leverage
The New York Times recently reported about CFTC’s conduct towards certain market participants, including Gemini.
CFTC documents point to some issues with the Biden-era case against Gemini. A central part of the case against Gemini was a whistleblower who the agency’s department of enforcement acknowledges made false statements.
“Finally, the whistleblower in this matter, Gemini’s former chief operating officer, has
significant credibility issues,” the CFTC stated, adding that the “Division’s investigation uncovered that the whistleblower himself made or had partial responsibility for several of the false statements charged in the Proposed Complaint.”
Then-Commissioner Pham’s staff had requested copies of the underlying documents in which the false statements were made.
A former Department of Enforcement trial attorney stated, “I really don’t think we should send the underlying documents, but let me know if anyone disagrees.”
The issue stems from a 2022 Biden-era lawsuit that accused Gemini of making “material false or misleading statements” to a regulator in 2017 about whether its Bitcoin auction pricing mechanism could be manipulated.
“Those statements were critical because they helped support Cboe’s launch of the first-ever Bitcoin futures contract, which used Gemini’s auction prices to determine settlement values,” according to the website Decrypt. Gemini paid a $5 million civil penalty to settle the futures lawsuit, but did not admit any wrongdoing.
Then, in June 2025, Gemini filed a complaint against the CFTC wherein the digital currency exchange founded by Tyler and Cameron Winklevoss accused the agency’s enforcement division of waging a seven-year “lawfare” campaign that prioritized career advancement over consumer protection and wasted millions in taxpayer dollars.
Gemini had alleged that the enforcement lawyers “selectively and unfairly weaponized” federal law to bring “dubious false statement charges” against Gemini.
U.S. District Judge Edward Kiel builds upon his finding that the CFTC “acted willfully and in bad faith on several occasions” in pursuing a lawsuit against Traders Global Group, or My Forex Funds.
“This conduct and communications implicate involvement of both the CFTC line attorneys and the highest levels of management in the CFTC’s Division of Enforcement,” the report said. “Far more is expected from a federal enforcement agency when it makes a mistake of this magnitude. In this instance, the CFTC chose obfuscation over clarity and transparency…”
Read the full article here