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The U.S. Commodity Futures Trading Commission has asked a judge to vacate a $5 million penalty imposed on cryptocurrency exchange Gemini Trust Company, arguing that regulators should never have accused the firm of making false statements related to its bitcoin futures business.
The CFTC and Gemini jointly filed papers on Wednesday seeking to rescind a January 2025 settlement reached during former President Joe Biden’s administration, under which Gemini paid a $5 million civil penalty and agreed to an injunction barring false or misleading statements to the agency.
The regulator and the crypto exchange argued the settlement should now be undone because of the CFTC’s changed approach to crypto enforcement under President Donald Trump.
In the filing, the CFTC and Gemini said the agency had “resorted to inappropriate tactics” to bring the lawsuit and “extract a settlement from Gemini.”
They also said the lawsuit had been based on a whistleblower account that was not credible.
According to the filing, Gemini had actually been the victim of fraud involving the company’s former Chief Operating Officer and two customers who allegedly received fraudulent rebates.
Rather than investigating the fraud against Gemini, the CFTC pursued claims that the company had made misleading statements about the integrity of its bitcoin futures trading business, according to the joint court filing.
The court papers also alleged regulators warned Gemini that it would not receive approval for a new prediction market platform while the enforcement action remained pending. Gemini later received approval in December 2025 for its prediction market product, Gemini Titan.
It was not clear from the court filing whether Gemini would be refunded for the $5 million penalty, which it already paid.
Gemini was founded by twin brothers Tyler Winklevoss and Cameron Winklevoss, who each donated $1 million in bitcoin to Trump’s 2024 presidential campaign.
The case also became entangled in a dispute over leadership of the CFTC. Former CFTC chair nominee Brian Quintenz accused Tyler Winklevoss last year of lobbying the White House to block his nomination because of the agency’s lawsuit against Gemini.
Trump later withdrew Quintenz’s nomination and instead selected Michael Selig to lead the regulator.
The Winklevoss twins first gained public prominence after suing Mark Zuckerberg over allegations he stole their idea for Facebook. The dispute was settled in 2008 for cash and stock.