On 13 January 2025, the United States Commodity Futures Trading Commission (US CFTC) announced that Gemini Trust Company LLC, a New York-based trust company, has been ordered by the US District Court for the Southern District of New York to pay a $5 million civil monetary penalty by a consent order. This penalty follows findings that Gemini made materially false or misleading statements and omissions during the self-certification process for a bitcoin futures product.
The case, which began with a US CFTC complaint on 2 July 2022, involved allegations of misconduct by Gemini from July to December 2017. During this period, Gemini’s representatives made or failed to disclose certain critical facts to the US CFTC about the bitcoin futures contract, which was to be settled based on the spot bitcoin price determined through an auction held on the Gemini platform. These misrepresentations, which included false claims about prefunding requirements, trade volumes, liquidity, and fee rebates, were deemed material to the US CFTC’s assessment of whether the contract was susceptible to manipulation.
The consent order imposes a permanent injunction on Gemini, prohibiting it from making similar misleading statements to the US CFTC in the future. The US CFTC stated that such actions undermine market integrity and its regulatory oversight, particularly in relation to complex digital asset derivatives. The court’s ruling also serves as a warning to other market participants about the consequences of providing false information to regulators.
The US CFTC initiated the legal proceedings with a complaint filed on 2 July 2022. It took over two years and six months for the case to conclude with the court’s final order issued on 6 January 2025.
(Source: https://www.cftc.gov/PressRoom/PressReleases/9031-25, https://www.cftc.gov/media/11721/enfgeminitrustcompanyorder010625/download)
