The Commodity Futures Trading Commission (CFTC) has announced a proposed settlement with Gemini Trust Company, possibly averting a trial.
In the deal, filed on January 6, 2025, Gemini would have to pay a $5 million penalty. It included an agreement that Gemini will not make false or misleading statements to the CFTC again according to Bloomberg report.
The problem began in June 2022 when the CFTC filed a lawsuit against Gemini, alleging it had misled the agency about its plan to offer Bitcoin futures contracts in 2017. The CFTC argued that Gemini never disclosed critical aspects of special fee arrangements it held with certain market participants.
According to CFTC, these agreements were better than the terms extended to the general public and were created in an effort to encourage more trading on the Gemini exchange; however, they were undisclosed to both the public and the CFTC.
Gemini has not commented yet, but the settlement comes before a trial that was scheduled to begin on January 21, 2025. The trial had already been delayed in December 2024 by a federal judge, who said there would be no more delays. If approved by the court, the settlement could save the parties a prolonged legal fight.
This case is part of the CFTC’s ongoing effort to regulate the crypto market. Over the past year, the CFTC has filed multiple cases against crypto companies, enforcing U.S. commodity laws. In its latest report, the CFTC stated it had collected over $17 billion in penalties and restitution, including from cryptocurrency firms, in the 2024 fiscal year.
