The U.S. Commodity Futures Trading Commission (CFTC) and the crypto exchange Gemini jointly filed a motion on Thursday seeking to overturn a January 2025 consent order, which the regulator now claims “should not have been filed.”
Background of the Case
This unusual about-face stems from a case initiated in June 2022, when the CFTC sued Gemini, alleging the exchange made false or misleading statements regarding Bitcoin futures contract manipulation risks. The exchange, founded by Cameron and Tyler Winklevoss, settled the charges in January 2025, agreeing to a $5 million civil penalty and a permanent injunction.
CFTC Acknowledges Weaknesses in Original Complaint
In Thursday’s filing, the CFTC acknowledged that the original complaint was largely based on a whistleblower’s account “known to be lacking in credibility,” and characterized the exchange as a “fraud victim.” The regulator stated there were “serious questions” about the strength of the evidence against Gemini, adding that personnel “improperly influenced the CFTC’s regulatory authority to create settlement leverage.”
Leadership Changes Precede Reversal
The reversal follows changes in the regulator’s leadership. Michael Selig was appointed as CFTC Chair in December 2025, after the White House withdrew Brian Quintenz’s nomination in September. Quintenz, a former CFTC commissioner and the Trump administration’s original nominee for Chair, had suggested the Winklevoss twins opposed his nomination because he would not commit to a public position on the agency’s enforcement action against their exchange.
Gemini’s Defense and Business Pivot
Gemini had vigorously contested the CFTC’s enforcement approach, filing a letter of complaint with the CFTC Inspector General in June 2025, alleging it was the victim of an abusive investigation and “lawfare.” The exchange maintained throughout the case that it was being unfairly pursued despite being a victim of the manipulation it had reported to regulators.
The regulatory reversal coincides with Gemini’s business pivot toward the emerging prediction market space, following sweeping layoffs and its exit from the UK, European, and Australian markets. The company’s Gemini Titan subsidiary was approved as a Designated Contract Market and launched its predictions marketplace in December 2025. In May 2026, Gemini Olympus received a DCO license from the CFTC to act as a clearinghouse for regulated derivatives trading, including prediction markets.
At the time of the layoffs, Gemini founders Cameron and Tyler Winklevoss outlined a thesis that “prediction markets will be as big or bigger than today’s capital markets,” a sector that the CFTC has aggressively pursued its right to regulate over that of state gaming authorities.
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