CFTC moves to vacate $5 million Gemini penalty amid Trump‑era policy

The Commodity Futures Trading Commission has asked a federal judge to vacate the $5 million penalty it imposed on Gemini Trust Company, the exchange founded by the Winklevess twins, arguing the original enforcement action was based on a non‑credible whistleblower and was politically motivated [1]. The filing marks a stark reversal from the Biden administration’s tougher stance on cryptocurrency firms and reflects a broader policy shift under President Donald Trump.

Key takeaways

• The CFTC is requesting a judge to erase a $5 million penalty against Gemini, claiming the original case relied on an unreliable whistleblower [2].
• CFTC Chair Michael Selig said the agency is correcting a “flawed enforcement action” and will not allow political targeting of crypto firms again [1].
• The Winklevoss brothers, major donors to Trump’s 2024 campaign, previously settled the case in January 2025, paying the penalty without admitting wrongdoing [3].
• The agency’s filing asserts Gemini was the victim of fraud by former employees, not the perpetrator of false statements to regulators [4].
• Critics note the timing raises concerns about conflicts of interest given the twins’ political contributions [2].

Reversing a Biden‑era enforcement action

The dispute began in 2022 when the CFTC sued Gemini, alleging the exchange misrepresented how its proposed bitcoin futures contract would be protected from market manipulation [1]. Gemini settled the case in January 2025, agreeing to a $5 million civil penalty and an injunction barring future misleading statements, just weeks before the Biden administration left office [3].

Now, under Trump’s leadership, the CFTC argues that the original complaint should never have been filed. The agency’s latest filing contends the whistleblower whose testimony underpinned the case was later found “not credible,” and that Gemini was actually targeted by fraudulent conduct from a former chief operating officer and two customers who received illicit rebates [2][4]. The filing also claims regulators improperly leveraged their authority by threatening to withhold approval for Gemini’s prediction‑market platform, Gemini Titan, during the enforcement proceedings—a threat that was later lifted when Titan received approval in December 2025 [3].

CFTC Chair Michael Selig, speaking on CNBC’s “Squawk Box,” framed the move as a correction of political targeting, saying the agency will not be used for “lawfare” and that the reversal will set a new standard for future administrations [1]. He declined to discuss case specifics, noting the litigation remains active. A CFTC spokesperson confirmed that, despite the request to vacate the settlement, Gemini will not receive a refund of the $5 million already paid [2].

Political context and industry implications

The Winklevoss twins have been prominent supporters of Trump’s 2024 campaign, contributing roughly $1 million each in and later donating over $1 million to a Trump‑aligned super PAC, MAGA Inc. [2]. Their political involvement has drawn scrutiny, especially after former CFTC nominee Brian Quintenz alleged the twins pressured the White House to block his nomination because he refused to revisit the Gemini settlement [2]. Trump subsequently withdrew Quintenz’s nomination and appointed Michael Selig as chair [1].