By Dietrich Knauth
NEW YORK, May 27 (Reuters) – The U.S. Commodity Futures Trading Commission asked a judge on Wednesday to vacate the agency’s $5 million penalty against a cryptocurrency exchange founded by twin brothers who donated to President Donald Trump’s election campaign in 2024.
The CFTC said regulators should never have accused Tyler and Cameron Winklevoss’ Gemini Trust Company of making false statements in connection with its bitcoin futures business.
Gemini settled the CFTC charges in January 2025 during the final weeks of President Joe Biden’s administration, paying a $5 million penalty and agreeing to an injunction that would prevent the company from making any false or misleading statements to the CFTC.
But Gemini and the CFTC have now agreed that the settlement should be vacated, citing the CFTC’s changed policy on crypto enforcement under Trump.
The Winklevoss brothers each donated $1 million in bitcoin to his election campaign in 2024.
The CFTC and Gemini said in jointly filed court papers that the settlement should be rescinded and the CFTC had “resorted to inappropriate tactics” to bring a lawsuit and “extract a settlement from Gemini.”
The CFTC and Gemini said that the agency, under the Biden administration, brought a lawsuit against Gemini based on a whistleblower account that was not credible, and that Gemini was actually the victim of a fraud by the company’s former chief operating officer and two customers who received fraudulent rebates from Gemini.
Rather than investigating the fraud against Gemini, the CFTC investigated Gemini for making allegedly misleading statements about the integrity of its bitcoin futures trading business, according to the joint court filing.
While the case was pending, regulators inappropriately leveraged their power by telling Gemini that it would not receive approval for a new prediction market platform while the CFTC’s enforcement action was pending, according to the court filing. Gemini received approval for its prediction market product, called Gemini Titan, in December 2025.
It was not clear from the court filing whether Gemini would be refunded for the $5 million penalty, which it already paid. Gemini did not immediately respond to a request for comment late Wednesday.
The Winklevoss twins first gained public prominence after suing Mark Zuckerberg, alleging he stole their idea for Facebook. They settled in 2008 for cash and stock.
Trump’s initial pick to lead the CFTC, Brian Quintenz, accused Tyler Winklevoss last year of lobbying the White House to stall his nomination over the CFTC lawsuit. Trump ultimately withdrew his nomination of Quintenz and named Michael Selig as the CFTC’s new chair.
(Reporting by Dietrich Knauth; Editing by Jamie Freed)
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