CFTC wants to reverse course on penalty against Winklevoss twins' crypto business

Source: Engadget

Mark Van Scyoc/Shutterstock

Background

The U.S. Commodity Futures Trading Commission (CFTC) has asked a judge to vacate a consent order it obtained against the Gemini Trust Company. Gemini, the crypto exchange founded by twins Tyler and Cameron Winklevoss, had agreed to a $5 million fine in early January 2025 after the CFTC sued the firm for making false or misleading statements about its Bitcoin operation. The settlement also included a permanent injunction prohibiting similar statements in the future, and Gemini has jointly filed a petition for relief from judgment.

Legal Action

• Consent order: The original settlement was reached in the final days of the Biden administration.
• Current request: The CFTC now seeks to overturn that consent order, despite the fine already being paid.
• Petition: Gemini has filed a petition asking the court to relieve it from the judgment.

Political Context

• The CFTC’s stance has shifted under the current administration.
• Former President Donald Trump has previously granted pardons to individuals involved in political and business ventures, and both Winklevoss brothers contributed $1 million in Bitcoin to his 2024 election campaign.
• The move to reverse the consent order appears to be more symbolic than financial, as the CFTC has stated that the penalties will not be returned.

Implications

• Symbolic significance: The action is viewed as an example of the federal government rewarding allies of the president, regardless of any alleged harms caused by the crypto business.
• Financial impact: With the fine already paid, the reversal does not affect Gemini’s finances directly but may set a precedent for future regulatory actions.

References

• CFTC press release: Request to vacate consent order
• Reuters report on Gemini settlement: Gemini agrees to $5 mln fine and injunction
• Related political pardons:
  • Nikola founder Trevor Milton pardon
  • Binance founder Changpeng Zhao pardon
• Background on Winklevoss legal challenges:
  • Lawsuit alleging $1 billion fraud
  • Gemini theft lawsuit