Gemini Trust Company, the cryptocurrency exchange founded by Tyler and Cameron Winklevoss, has reached a proposed $5 million settlement with the U.S. Commodity Futures Trading Commission (CFTC) to resolve allegations of providing misleading information during its 2017 Bitcoin futures initiative.
The proposed consent order, which requires federal court approval, would end a civil case launched by the CFTC in June 2022. The settlement prevents a trial that was scheduled for January 21.
According to court documents, the CFTC accused Gemini of making false statements while seeking approval to launch what would have been one of the first U.S.-regulated Bitcoin futures contracts. The regulator claimed Gemini failed to disclose key details about preventing market manipulation in Bitcoin prices, which were meant to serve as benchmarks for derivative contracts.
The case centered on statements made between July and December 2017 regarding the "Gemini Bitcoin Auction" - a system designed to establish spot Bitcoin prices for futures settlement. The CFTC alleged Gemini omitted information about preferential fee arrangements with certain market participants, including market makers, that were not publicly disclosed.
Under the proposed settlement terms, Gemini must pay a $5 million civil penalty and is prohibited from making false or misleading statements to the CFTC in future dealings. The agreement marks a resolution to one of several regulatory challenges facing the exchange.
The settlement comes as the CFTC intensifies its oversight of cryptocurrency markets. In the 2024 fiscal year, the commission recovered over $17 billion in monetary relief, with a substantial portion coming from enforcement actions against crypto firms.
This case reflects broader regulatory scrutiny of the cryptocurrency sector, as U.S. authorities work to establish clearer oversight frameworks for digital asset businesses. The resolution may help define parameters for future interactions between crypto exchanges and regulatory bodies.