Key Takeaways
- • The CFTC, now led by Trump appointee Michael Selig, has filed a motion to vacate a January 2025 consent order against Gemini Trust Company (founded by the Winklevoss twins), which included a $5 million civil penalty and an injunction barring false statements to the agency.
- • The original order stemmed from false statements Gemini made to the CFTC in late 2017 regarding a bitcoin futures contract; the $5 million penalty would not be returned to the company even if the court approves the CFTC's motion to vacate.
- • Former CFTC Chair Tim Massad characterized the agency's move as "very unusual," noting that during his tenure the CFTC enforcement division "only brought cases that were strong" and that the staff acted with "integrity and care."
- • The timing of the CFTC's action raises questions about potential political influence, as the Winklevoss twins donated to Trump's 2024 presidential campaign and the current CFTC leadership represents a policy shift on crypto enforcement under the Trump administration.
Summary
The Commodity Futures Trading Commission filed a motion on Wednesday to vacate its January 2025 consent order against Gemini Trust Company, the cryptocurrency exchange founded by twins Tyler and Cameron Winklevoss. The original enforcement action imposed a $5 million civil penalty and an injunction prohibiting the company from making false statements to the agency. The order related to misstatements Gemini made to the CFTC during the second half of 2017 concerning a bitcoin futures contract.
The agency's move to withdraw the enforcement action has drawn scrutiny from former CFTC leadership. Tim Massad, who previously chaired the CFTC, told CNBC that the motion is "very unusual," adding that he lacks specific knowledge of the case against Gemini but that during his tenure the agency's enforcement division brought only legally sound cases. Massad emphasized that CFTC staff "made decisions based on the law and the facts" and operated with professional integrity.
The timing and context of the CFTC's action underscore broader questions about regulatory priorities. The current CFTC is headed by Michael Selig, a Trump appointee, while the Winklevoss twins donated to Trump's 2024 presidential campaign. The shift in enforcement posture reflects what Reuters has characterized as the CFTC's "changed policy on crypto enforcement under Trump." According to the CFTC, the $5 million penalty already paid by Gemini will not be refunded should a federal court judge in New York approve the motion to vacate the consent order.
Gemini's attorney, Avi Perry, indicated support for the CFTC's action in a statement to CNBC, though specific details were not elaborated. The case outcome will depend on whether the federal judge decides to grant the CFTC's unusual request to undo an enforcement order that the agency itself brought.
The agency's move to withdraw the enforcement action has drawn scrutiny from former CFTC leadership. Tim Massad, who previously chaired the CFTC, told CNBC that the motion is "very unusual," adding that he lacks specific knowledge of the case against Gemini but that during his tenure the agency's enforcement division brought only legally sound cases. Massad emphasized that CFTC staff "made decisions based on the law and the facts" and operated with professional integrity.
The timing and context of the CFTC's action underscore broader questions about regulatory priorities. The current CFTC is headed by Michael Selig, a Trump appointee, while the Winklevoss twins donated to Trump's 2024 presidential campaign. The shift in enforcement posture reflects what Reuters has characterized as the CFTC's "changed policy on crypto enforcement under Trump." According to the CFTC, the $5 million penalty already paid by Gemini will not be refunded should a federal court judge in New York approve the motion to vacate the consent order.
Gemini's attorney, Avi Perry, indicated support for the CFTC's action in a statement to CNBC, though specific details were not elaborated. The case outcome will depend on whether the federal judge decides to grant the CFTC's unusual request to undo an enforcement order that the agency itself brought.
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