The Commodity Futures Trading Commission (CFTC) has reached a proposed settlement with Gemini Trust Company, which would prevent a looming trial set for later this month. According to the settlement, filed on January 6, 2025, Gemini would pay a $5 million penalty and agree to avoid making false or misleading statements to the CFTC in the future.
The issue arose in June 2022, when the CFTC filed a lawsuit against Gemini, accusing the company of misleading the agency about its plans to offer Bitcoin futures contracts in 2017. Specifically, the CFTC argued that Gemini failed to disclose special fee arrangements it made with certain market participants. These arrangements, which provided better terms than those available to the general public, were aimed at boosting trading volume on the Gemini exchange. However, the agreements were never made known to either the public or the CFTC.
Although Gemini has yet to provide an official comment, the settlement comes just ahead of a trial that was initially scheduled for January 21, 2025. In December 2024, a federal judge delayed the trial, stating there would be no further postponements. If approved by the court, the settlement would allow both parties to avoid a prolonged legal battle.
This case is part of the CFTC’s broader effort to enforce regulations within the cryptocurrency industry. Over the past year, the CFTC has taken action against several crypto firms, asserting its authority over U.S. commodity laws. In its most recent report, the CFTC revealed that it had collected over $17 billion in penalties and restitution during the 2024 fiscal year, including significant fines from cryptocurrency companies.
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