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

Gemini Trust Co. has agreed to pay $5 million to settle a Commodity Futures Trading Commission (CFTC) lawsuit that accused the company of misleading authorities during its attempt to launch the first regulated Bitcoin futures contract in the United States.

The settlement was disclosed Monday in a proposed consent order filed in the U.S. District Court for the Southern District of New York.

Details of the Settlement

According to a Bloomberg report, Gemini will close the case without admitting or denying liability. This resolution also avoids a trial that was originally scheduled to begin on January 21st, with a pre-trial conference set for January 13th.

In 2022, the CFTC filed a lawsuit against the company in federal court in Manhattan, alleging that it had 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 company’s efforts to gain regulatory approval for a Bitcoin futures contract.

Essentially, the watchdog implied that safeguards to prevent price manipulation were inadequate and not accurately described to the commission. Gemini consistently denied any wrongdoing, maintaining that the proposed futures contract worked as intended without harming investors.

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

“The reference price was reliable, no investors were harmed, no price manipulation occurred, and the CFTC has not alleged any concerns with the contract itself.”

During the investigation, he complied with a subpoena by providing laptops belonging to two former managers as part of a related criminal investigation. That criminal investigation concluded without charges, but the civil enforcement case remained active, eventually reaching a $5 million settlement.

The Trump effect

The action against Gemini is among many cases filed during the Joe Biden administration, which has emphasized stricter regulatory oversight of the crypto industry. However, with President Donald Trump set to take office for a second term on January 20, crypto advocates anticipate a more lenient regulatory environment.

Ripple CEO Brad Garlinghouse recently noted a “Trump effect” in the company’s strategy. He noted that 75% of Ripple’s job openings are now in the United States, a significant shift after years of international expansion due to regulatory uncertainty under the outgoing chairman of the Securities and Exchange Commission (SEC ), Gary Gensler.

Garlinghouse noted that the company closed more business deals in the United States in the last six weeks of 2024 than in the previous six months combined.

Meanwhile, the upcoming inauguration has fueled a rally in Trump-themed meme coins, some of which have seen double- and triple-digit gains as market optimism grows in anticipation of friendlier crypto policies.

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