Gemini Trust Settles CFTC Lawsuit for $5M Over Bitcoin Futures Contract Allegations: Report

Gemini Trust Company sued the Commodity Futures Trading Commission (CFTC) alleging that the firm misled officials in its attempt to launch the first US-regulated Bitcoin futures contract. He agreed to pay $5 million to settle.

The deal was announced Monday in a consent order filed in the U.S. District Court for the Southern District of New York.

Details from settlement

According to a Bloomberg report, Gemini will close the case without admitting or denying liability. The motion also removes the pre-trial conference scheduled for January 13, which was originally scheduled to begin on January 21.

In the year In 2022, the CFTC filed a lawsuit against the company in Manhattan federal court, alleging that it provided inaccurate and misleading information about its strategies to prevent Bitcoin price manipulation. The statements in question were allegedly made between July and December 2017 as part of the firm's efforts to gain regulatory approval for its Bitcoin futures contract.

Essentially, the watchdog is showing that safeguards against price gouging are inadequate and not properly communicated to the Commission. Gemini consistently denied any wrongdoing, maintaining that the proposed futures contract was executed as intended without harming the investor.

In the year In an August 2022 statement responding to the complaint, the company asserted:

“The reference price was reliable, no investors were harmed, no price manipulation occurred, and the CFTC raised no concerns about the contract.”

During the investigation, he complied with subpoenas by providing the laptops of two former executives as part of a related criminal investigation. That criminal investigation ended without charges, but the civil enforcement case remains active, eventually resulting in a $5 million settlement.

Trump's influence

The crackdown on Gemini is one of several cases during the Joe Biden administration, which has emphasized tighter regulation of the crypto industry. However, as President Donald Trump takes office for a second term on January 20, crypto advocates expect a more benign regulatory environment.

Ripple CEO Brad Garlinghouse recently suggested a “Trump effect” on the company's strategy. He noted that 75% of Ripple's job openings are now US-based, a major shift after years of expanding globally, thanks to outgoing Securities and Exchange Commission (SEC) Chairman Gary Gensler.

Garlinghouse highlighted that the firm closed more US trade deals in the last six weeks of 2024 than in the previous six months.

Meanwhile, the upcoming inauguration fueled a rally in Trump-owned coins, some of which saw double- and triple-digit gains, as market optimism grew in anticipation of friendly crypto policies.