The U.S. Commodity Futures Trading Commission has moved to scrap a $5 million enforcement penalty against crypto exchange Gemini, marking one of the clearest signs yet of how dramatically Washington’s approach to digital assets has shifted under President Donald Trump.
In a filing submitted Wednesday, the CFTC asked a federal judge to vacate the settlement it reached with Gemini Trust Company earlier this year, arguing that the agency should never have pursued the case in the first place. The regulator now says the lawsuit against the exchange founded by twin brothers Tyler Winklevoss and Cameron Winklevoss relied on a flawed whistleblower account and reflected what it described as “inappropriate tactics” by the previous administration.
The reversal is striking because the case had already been settled in January 2025, during the final stretch of former President Joe Biden’s administration. Under that agreement, Gemini paid a $5 million fine and accepted restrictions barring it from making false or misleading statements to the regulator regarding its bitcoin futures operations.
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Now, both Gemini and the CFTC are jointly asking the court to unwind the entire arrangement.
The development underscores the extent to which federal crypto oversight is being rewritten as Trump’s administration moves away from the aggressive enforcement posture that defined the Biden years. It also highlights the growing political influence of crypto executives who backed Trump’s return to office.
The Winklevoss brothers each donated $1 million worth of bitcoin to Trump’s 2024 campaign, making them among the most visible crypto-industry supporters of the president. Since returning to the White House, Trump has increasingly positioned himself as an ally of the digital asset sector, promising lighter-touch regulation and criticizing what his allies describe as politically motivated enforcement actions against crypto firms.
The court filing goes beyond merely requesting that the penalty be removed. It effectively accuses the previous CFTC leadership of weaponizing enforcement powers against Gemini.
According to the filing, the agency pursued the exchange instead of focusing on what Gemini says was the real misconduct: an alleged fraud scheme involving the company’s former chief operating officer and two customers who reportedly received improper rebates. The document claims regulators relied on unreliable testimony while ignoring evidence that Gemini itself had been harmed.
The filing also alleges that regulators used leverage unrelated to the enforcement case by delaying approval for Gemini’s prediction-market platform while litigation was ongoing. Gemini eventually received approval for the platform, called Gemini Titan, in December 2025.
The case comes as a part of reordering inside Washington’s financial regulatory structure as agencies recalibrate crypto oversight under new political leadership.
Trump’s initial choice to lead the CFTC, Brian Quintenz, became entangled in a dispute involving Tyler Winklevoss. Quintenz accused the Gemini co-founder last year of lobbying the White House to block his nomination because of the ongoing enforcement action. Trump later withdrew Quintenz’s nomination and instead selected Michael Selig to lead the agency.
For the broader crypto industry, the Gemini reversal is likely to be viewed as a signal that firms targeted during the Biden-era crackdown may seek to revisit past settlements or challenge ongoing investigations. It may also embolden exchanges and token issuers, arguing that prior enforcement actions exceeded regulatory authority or relied on ambiguous rules.
However, the decision is expected to further intensify criticism from lawmakers and consumer advocates who warn that regulators are retreating too far from oversight just as crypto markets regain momentum. Bitcoin prices and trading activity have rebounded sharply in recent months, while firms across the industry are pushing deeper into products tied to derivatives, prediction markets, and tokenized finance.
The unresolved question is whether courts will accept the government’s unusual request to undo a finalized settlement. Legal experts say such reversals are rare because settlements are generally designed to bring permanent closure to disputes. Another point of uncertainty is whether Gemini would recover the $5 million already paid to the government. The joint filing did not specify whether the penalty would be refunded.
Gemini’s founders first entered the public spotlight through their legal battle with Mark Zuckerberg over the origins of Facebook. They later became major players in the cryptocurrency industry, building Gemini into one of the most recognizable U.S.-based digital asset exchanges.
Now, their company is at the center of what may become a defining test of how far the Trump administration is willing to go in dismantling the previous administration’s crypto enforcement legacy.