The U.S. Commodity Futures Trading Commission (CFTC) has formally requested that a federal judge vacate a $5 million penalty previously imposed on Gemini Trust Company. The move marks a significant reversal in the agency’s enforcement stance regarding the cryptocurrency exchange founded by Tyler and Cameron Winklevoss. The settlement, which was finalized in early 2025 during the final weeks of the Biden administration, included both the monetary fine and an injunction against the firm.

In a joint court filing, both the CFTC and Gemini argued that the original enforcement action was based on flawed premises. The agency now contends that the initial lawsuit relied on a whistleblower account that lacked credibility. Furthermore, the filing suggests that Gemini was actually the victim of fraud perpetrated by a former chief operating officer and two customers, rather than the perpetrator of misleading statements regarding its bitcoin futures business. The parties stated that the agency had utilized inappropriate tactics to secure the settlement.

Beyond the specific allegations, the filing highlights that the regulatory pressure hindered Gemini’s business operations, specifically by delaying approval for its prediction market platform, Gemini Titan, which was eventually cleared in December 2025. The shift in the CFTC’s position follows a broader change in crypto enforcement policy under the current administration. While the request to vacate the judgment has been submitted, it remains unclear whether the $5 million already paid by the exchange will be refunded.