SDNY judge Hellerstein denies joint Gemini-CFTC bid to vacate $5M settlement

Judge Alvin Hellerstein of the U.S. District Court for the Southern District of New York on October 15 denied the joint motion by Gemini Trust Company and the Commodity Futures Trading Commission to vacate the January 2025 consent order in CFTC v. Gemini Trust Company, LLC. The $5 million civil penalty — already paid — and the permanent injunction against making false or misleading statements to the CFTC stay in force. The Block broke the ruling; crypto.news and Law360 confirm, as does Bloombingbit's wire summary.

What the court held

Hellerstein addressed the parties' three grounds under Federal Rule of Civil Procedure 60(b):

• Not a factual change. The CFTC's internal review and its reassessment of the whistleblower's credibility were, in the court's language, "known to the parties before the settlement" and so "does not constitute a significant change in factual circumstances".
• No involuntary consent. Gemini litigated for roughly three years, knew about the internal issues it now cites (including a fraud scheme involving a former chief operating officer), and "made the calculated decision to settle the case shortly before trial".
• Policy shift is not enough. The CFTC's current position that the case should not have been brought "does not require vacatur or other relief."

The parties had filed jointly in May 2026 asking the court to vacate the consent order's remaining prospective provisions (not the paid penalty) under Rule 60(b). The CFTC's filing argued the 2022 complaint "largely based on a whistleblower's account known to be lacking in credibility" should not have been filed under current enforcement standards. Gemini has already paid the $5 million; a CFTC spokesperson said in May that the agency would not refund it regardless of outcome.

The underlying case

The CFTC sued Gemini in 2022, alleging misstatements during the agency's 2017 review of the exchange's bitcoin futures product. The January 2025 consent order, entered three weeks before trial was scheduled, imposed:

• a $5 million civil monetary penalty;
• a permanent injunction barring Gemini from false or misleading statements, representations, or omissions to the CFTC.

The injunction is the piece that still bites: it keeps Gemini on the record as having consented to a Commission finding, and it continues to constrain the firm's dealings with the CFTC going forward.

Why this ruling matters beyond Gemini

The ruling is a check on a pattern across the current administration's crypto enforcement: joint motions, consent cancellations, and voluntary dismissals of actions begun by prior staff. Hellerstein's reasoning — that a sitting Commission's change of view is not, by itself, a Rule 60(b) ground — applies to any attempt to reopen a settled consent order on the strength of a policy pivot alone. Former CFTC chair Tim Massad called the May reversal attempt "extraordinarily unusual"; the court has now said the law agrees with that framing.

The ruling does not reach any ongoing or paused crypto enforcement at the SEC, where parallel reversals have proceeded via dismissal before judgment rather than through Rule 60(b) motions on settled orders — a procedurally lighter route that avoids the voluntariness analysis Hellerstein applied here.

What to watch

1. Appeal. Neither party has stated whether they will seek Second Circuit review. A Rule 60(b) denial is appealable; whether the parties pursue it is a signal.
2. Other paused matters. The CFTC's May filing framed the Gemini reversal as part of a wider enforcement reassessment. Any similar motion in another settled matter now has to work around Hellerstein's reasoning.
3. Senate oversight. The Senate Agriculture Committee has oversight of the CFTC; the May reversal has drawn questions, and the denial will revive them.

Context

Rule 60(b) sets a high bar on purpose: finality is the default. A consent order voluntarily entered on a contested record is not reopened because the parties later agree they prefer it gone. The CFTC can decline to pursue similar cases going forward; it cannot, without more, undo a judgment on the strength of its own changed mind. The January 2025 order was itself the end of a nearly three-year litigation that saw Gemini contest the agency's claims before choosing to settle — the record Hellerstein's opinion leans on.