US regulator seeks to vacate $5 million crypto penalty against Gemini exchange

The US Commodity Futures Trading Commission has asked a federal judge to vacate a consent order against the Gemini Trust Company, the cryptocurrency exchange operated by brothers Tyler and Cameron Winklevoss. The regulatory body’s request marks a significant shift in the enforcement stance taken against the exchange just months after the penalty was finalised.

Gemini had agreed to pay a $5 million fine in early January 2025 following a lawsuit by the CFTC. The agency alleged that the exchange had made false or misleading statements regarding its bitcoin operations. As part of the original settlement, the company also accepted a permanent injunction preventing it from making similar statements in the future.

The original consent order was established during the final days of the Joe Biden administration. The current CFTC, operating under the Trump administration, is now pursuing the reversal. Gemini has jointly filed a petition for relief from judgment to support the request to overturn the previous ruling.

Political context surrounding the decision has drawn attention, with reports indicating that each Winklevoss brother donated $1 million in bitcoin to Donald Trump’s 2024 election campaign. The Trump administration has previously granted pardons to individuals who supported his political and business endeavours, leading to observations that the federal government may be rewarding allies.

Despite the legal reversal being sought, the CFTC has explicitly stated that the $5 million fine will not be returned to the company. Consequently, the regulator characterised the move as carrying symbolic rather than financial weight, as the penalty had already been paid in full.