The U.S. Commodity Futures Trading Commission (CFTC) has finalized a settlement with Gemini Trust Company, an American crypto exchange and custodian bank.
According to a recent filing in the U.S. District Court for the Southern District of New York, the CFTC has submitted a proposed consent order to settle all remaining claims against Gemini. If the order is approved, Gemini would be obligated to pay a $5 million civil penalty and prohibited from making false or misleading statements to the CFTC.
CFTC Files Lawsuit Against Gemini
The CFTC brought a civil lawsuit against Gemini in June 2022. The lawsuit accused the crypto company of providing false or misleading information during its 2017 effort to launch Bitcoin futures contracts.
Under the proposed order’s terms, the crypto firm would admit to its actions, acknowledging that “Gemini Trust reasonably should have known [the statements] were false or misleading.”
“Gemini Trust […] did not disclose that from 2016 through the Relevant Period, Gemini Trust at times entered into bespoke fee arrangements not available to all customers with certain market participants, including market makers, that were not disclosed on Gemini Trust’s website, at more favorable terms than those listed on the website and designed to promote trading in the Gemini Trust Auction,” the filing wrote.
In December, a federal judge rescheduled the start of the civil trial between Gemini and the CFTC to January 21, emphasizing that no further delays will be allowed.
CFTC Legal Battles With Big Firms
While the CFTC battles with Gemini, the agency is pursuing several ongoing cases against crypto companies for alleged breaches of U.S. commodities laws. In December, the regulator announced it had secured over $17 billion in civil penalties, disgorgement, and restitution from cases involving crypto firms during the 2024 fiscal year.
Similarly, in a settlement with crypto exchange giant Binance, the CFTC secured $150 million from its founder and former CEO Changpeng Zhao and $1.35 billion in civil penalties. Additionally, the court ordered Binance to pay $1.35 billion in disgorgement.
Having secured all these settlements, United States President Donald Trump was reportedly evaluating the possibility of replacing CFTC Chair Rostin Behnam. In contrast to the U.S. Securities and Exchange Commission (SEC), another key financial regulator for digital assets, no CFTC commissioners have publicly indicated plans to step down before Trump’s tenure begins.
