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 while trying to sell the first futures contract into the US-regulated Bitcoin launch.

The agreement was disclosed Monday in a proposed consent order filed in the US District Court for the Southern District of New York.

Details from the arrangement

According to the Bloomberg report, Gemini will close the case without admitting or denying responsibility. This resolution also avoids a trial 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 Manhattan federal court, claiming that they provided inaccurate and misleading information about their strategies to prevent Bitcoin price manipulation. These statements are said to have been made between July and December 2017 as part of the company's efforts to obtain regulatory approval for the Bitcoin futures contract.

Basically, the watchdog meant that safeguards to prevent price manipulation were not adequate and had not been properly explained to the commission. Gemini has consistently denied any wrongdoing, insisting that the proposed futures contract performed as intended without causing harm to investors.

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

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

During the investigation, they complied with a subpoena by handing over laptops belonging to two former officers as part of a related criminal investigation. That criminal investigation ended without charges, but the civil enforcement case remained, and ultimately resulted in a $5 million settlement.

Trump's victory

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

Ripple CEO Brad Garlinghouse recently highlighted the “Trump effect” on the company's strategy. He noted that 75% of Ripple's job openings are now based in the US, a major shift after years of international expansion due to regulatory uncertainty under Securities and Exchange Commission (SEC) Chairman Gary Gensler .

Garlinghouse pointed out that the company closed more US business deals 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 more hawkish crypto policies. friendly