The Commodity Futures Trading Commission has asked a federal judge to vacate a $5 million settlement imposed last year on Gemini Trust Company, the cryptocurrency exchange founded by billionaire twins Cameron and Tyler Winklevoss. The move represents a dramatic reversal by the agency under President Donald Trump's administration.
The filing seeks to erase a Biden-era enforcement action that accused Gemini of making false or misleading statements tied to a proposed bitcoin futures product. The case had been settled shortly before Trump returned to office, with Gemini agreeing to pay a civil penalty without admitting wrongdoing, according to CNN.
The CFTC now says its earlier case relied heavily on testimony from a whistleblower whose claims were later found to lack credibility. The agency stated in its latest filing that Gemini had actually been targeted by fraudulent conduct rather than engaging in wrongdoing.
"These findings not only call into question the CFTC's enforcement process in this instance but also demonstrate the necessity of the federal government's revised enforcement approach and standards, including in the digital asset space," the agency said in its court filing.
The agency also emphasized that its changing position reflects the Trump administration's broader policy shift toward cryptocurrency regulation. Since returning to office, Trump officials have moved to soften several enforcement approaches adopted during former President Joe Biden's administration, particularly involving digital asset companies, according to Bloomberg.
A CFTC spokesperson has confirmed that Gemini would not receive a refund of the $5 million penalty despite the agency's attempt to vacate the settlement.
The Winklevoss twins have become prominent supporters of Trump and Republican crypto policy initiatives in recent years. The brothers attempted to donate $1 million each in bitcoin to Trump's 2024 presidential campaign, though the contributions were partially refunded after exceeding federal donation limits.
The twins later contributed more than $1 million combined to Trump-aligned super PAC MAGA Inc. ahead of the president's inauguration, according to federal campaign finance filings.
The CFTC move also comes after a dispute involving Brian Quintenz, Trump's original nominee to chair the agency. Quintenz alleged earlier this year that the Winklevoss brothers had pressured White House officials to withdraw his nomination after he declined to commit to revisiting the Gemini settlement, according to The Wall Street Journal.
Trump later withdrew Quintenz's nomination and selected Michael Selig to lead the CFTC instead.
Gemini was originally sued by the CFTC in 2022 over statements tied to a bitcoin futures contract the exchange sought to launch in partnership with the Chicago Board Options Exchange. Regulators at the time argued the company provided misleading information during the approval process involving safeguards against market manipulation.
The case became part of a wider crackdown by US regulators on cryptocurrency firms after the collapse of several high-profile digital asset companies, including FTX and Celsius Network. Federal agencies under Biden increased enforcement actions against exchanges, lenders and token issuers while arguing that weak oversight posed risks to investors and broader financial markets.
The Trump administration has since adopted a more industry-friendly stance. Earlier this year, Trump signed the GENIUS Act regulating stablecoins into law during a White House ceremony attended by the Winklevoss brothers, according to IBT.
The White House and congressional Republicans have increasingly argued that stricter regulation pushed crypto innovation overseas while weakening US competitiveness in financial technology and blockchain development.
At the same time, critics of the administration's approach have raised concerns over potential conflicts of interest involving political donations from cryptocurrency executives and investors, particularly as several federal agencies reconsider prior enforcement actions against firms connected to major Republican donors.
Gemini did not publicly comment on the latest court filing. The court has not yet ruled on the CFTC's request to vacate the settlement.
