CFTC Requests Court to Dismiss Lawsuit from Biden Administration Against Crypto Exchange Gemini

The Commodity Futures Trading Commission (CFTC) is requesting a court to dismiss a lawsuit from the Biden administration against the cryptocurrency exchange Gemini, asserting that the agency now recognizes Gemini as “legal.”

C.F.T.C. I participated Gemini Trust Company, LLC, Motion for Judgment Relief CFTC v. Gemini Trust Company LLC The lawsuit was originally initiated in June 2022 within the Southern District Court of New York, and a consent order was agreed upon in January 2025.

The CFTC reported that it completed a thorough review regarding past investigations involving Gemini and took into account recent shifts in federal digital asset policy, which have led to the conclusion of numerous cases within the agency.

They determined that the charges against Gemini were unwarranted and wouldn’t stand up under current enforcement guidelines. The review also highlighted several findings:

• The complaint relied on a whistleblower account that was deemed “unreliable.”
• The investigation mistakenly targeted Gemini, perceived as a victim rather than focusing on those allegedly committing fraud.
• Questions arose concerning the robustness of the evidence against Gemini.
• Requests for “corroborating evidence” were withheld from commissioners during the CFTC’s votes regarding the complaint against Gemini.
• The CFTC’s internal discussions were mentioned in the complaint, with the litigants leveraging deliberative process privilege to keep critical evidence from Gemini.
• There were indications that certain employees improperly swayed CFTC regulators to gain leverage for settlements.

According to a recent report from the New York Times, issues surrounding the CFTC’s actions against various market participants, including Gemini, surfaced in detail.

The CFTC documentation outlines several problems related to the lawsuit from the Biden administration involving Gemini. Central to the allegations was a whistleblower, whose credibility the agency’s enforcement division acknowledged was compromised.

“Ultimately, the whistleblower, Gemini’s former chief operating officer,
exhibited “Significant reliability issues,” according to the CFTC. It was noted that the investigation revealed the whistleblower was involved in some of the alleged false claims presented in the proposed complaint.

At the time, Secretary Pham’s staff requested documentation supporting the allegations of false statements.

A former enforcement trial attorney remarked, “I really don’t think we should send the supporting documents, but if anyone has concerns, please share.” This situation relates to a 2022 lawsuit containing accusations that Gemini, as early as 2017, provided “materially false or misleading statements” to regulators regarding potential manipulation of Bitcoin auction pricing mechanisms.

“These assertions were significant since they aided Cboe in launching the first Bitcoin futures contract, which relied on Gemini’s auction prices for settlement amounts.” Decrypt reported. Gemini ended up paying a $5 million civil penalty to resolve the case concerning futures but did not admit to any wrongdoing.

Furthermore, Gemini filed a complaint in June 2025, accusing the CFTC Enforcement Division of a prolonged campaign of “illegal conduct” that prioritized personal career advancement over consumer protection, resulting in significant waste of taxpayer money.

Gemini asserted that the enforcement lawyers “unfairly weaponized” federal law to pursue “false statement charges” against them.

“DOE staff were not motivated by lawful principles or a genuine intent to protect commodity markets,” Gemini’s legal team previously stated. “Instead, these lawyers appeared to be driven by personal ambition to achieve high-profile victories at the expense of Gemini Trust.”

The former chief prosecutor admitted during the CFTC’s review of the complaint that he expressed to the committee, “…there were no red flags raised. It was a contentious document where we knew some matters existed, yet they remained unaddressed.”

The CFTC has faced previous reproach for its litigation practices.

In July 2025, a federal judge found that the U.S.-Canadian trading company committed procedural misconduct, ordering them to pay $3.1 million in legal fees.

U.S. District Judge Edward Keel’s findings indicated the CFTC ” acted intentionally and maliciously on several occasions” while pursuing its case against Traders Global Group (My Forex Funds).

At that time, Caroline Pham, who was acting CFTC chair, condemned the lawsuit’s conduct as “inexcusable.”

A report from May 2025 Special Master noted that “On multiple occasions, the CFTC deliberately pursued confusion and evasion rather than being forthright, fully aware that their sworn declarations were flawed. This case requires substantial deterrent actions due to the gravity of the conduct.”

“If sanctions aren’t applied, this behavior is likely to recur,” the report further emphasized.

“This conduct implies involvement from both CFTC line attorneys and higher management within the Enforcement Division,” the report stated. “Given the severity of the errors made, one would expect a higher standard of accountability from federal enforcement. In this instance, the CFTC opted for confusion instead of clarity.”