The US Commodity Futures Trading Commission (CFTC) has reached an agreement with Gemini Trust Company that could allow the firm to avoid a civil trial if approved by a judge.
According to a Jan. 6 filing in the US District Court for the Southern District of New York, the CFTC filed a proposed consent order to resolve all outstanding claims against Gemini. If approved, Gemini would be required to pay a $5-million civil monetary penalty and be enjoined from “making false or misleading statements” to the CFTC.
Proposed consent order between CFTC and Gemini Trust. Source: SDNY
The civil case filed against Gemini by the CFTC in June 2022 alleged the crypto firm made false or misleading statements related to its 2017 bid to offer Bitcoin (BTC) futures contracts.
As part of the proposed order, the crypto firm would acknowledge this conduct, admitting “that Gemini Trust reasonably should have known [the statements] were false or misleading.”
“Gemini Trust […] did not disclose that from 2016 through the Relevant Period, Gemini Trust at times entered into bespoke fee arrangements not available to all customers with certain market participants, including market makers, that were not disclosed on Gemini Trust’s website, at more favorable terms than those listed on the website and designed to promote trading in the Gemini Trust Auction,” said the filing.
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In December, a federal judge pushed the start date of the civil trial between Gemini and the CFTC to Jan. 21, adding that “no further adjournments will be granted.”
Cointelegraph reached out to Gemini for comment regarding the proposed order but did not receive a response at the time of publication.
Windfall from enforcement actions
The CFTC has several cases pending with crypto firms over alleged violations of US commodities laws. In December, the commission reported that it had recovered more than $17 billion in civil monetary penalties, disgorgement and restitution from cases, including crypto firms, in the 2024 fiscal year.
President-elect Donald Trump, scheduled to be inaugurated on Jan. 20, was reportedly considering replacing CFTC Chair Rostin Behnam. Unlike at the US Securities and Exchange Commission — another crucial financial regulator for digital assets — no commissioners at the CFTC have publicly suggested resigning ahead of Trump’s term.
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