Gemini Criticizes CFTC’s Alleged Misconduct
Gemini Trust Company has voiced strong accusations against the Commodity Futures Trading Commission (CFTC), alleging that the organization’s staff has engaged in a prolonged campaign of “trophy-hunting lawfare.” The crypto exchange claims that the CFTC has based its actions on “fabricated” statements, misapplying the Commodity Exchange Act (CEA) for over seven years to target Gemini unjustly.
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Gemini’s Allegations Against CFTC’s Enforcement Division
Recently, Gemini Trust reached out to the CFTC’s Inspector General, Christopher Skinner, with a detailed letter outlining their grievances. This communication raised serious concerns about the conduct of the Division of Enforcement (DOE) against Gemini over the years. The letter accuses the DOE staff of unfairly wielding the CEA to level dubious charges of false statements against Gemini Trust, adopting legal stances that seemingly disregard fundamental principles of justice and governance.
Background on CFTC’s Legal Action Against Gemini
In 2022, the CFTC initiated legal proceedings against Gemini, asserting that the exchange provided “false and misleading statements” concerning its strategies to prevent Bitcoin (BTC) market manipulation in 2017. The CFTC’s complaint alleged misleading information was presented during the evaluation of a potential BTC futures contract self-certification.
Gemini’s Settlement and Continuing Discontent
Despite agreeing to a $5 million settlement with the CFTC in January 2025, Gemini maintains that the settlement was not an admission of wrongdoing. The letter suggests the decision was driven by a lack of viable alternatives at the time. Gemini contends that the CFTC’s actions stem from a pursuit of personal accolades rather than market protection, driven by DOE personnel seeking high-profile victories.
Claims of Misconduct and Misappropriation
Gemini further argues that the DOE neglected to acknowledge their victimization by fraudulent actors and dismissed accusations originating from a discredited former employee. The letter accuses the DOE of misusing taxpayer funds to pursue what Gemini describes as “fabricated and manufactured claims” against them.
Call for Regulatory Reform within the CFTC
Gemini has also criticized the internal culture of the DOE, describing it as “toxic” and “out of control.” Public remarks by CFTC acting chair, Caroline Pham, have highlighted these issues, indicating a shift towards restoring regulatory clarity. Pham has been vocal about moving away from the previous administration’s “regulation by enforcement” strategy, emphasizing a return to foundational regulatory practices.
Pham’s Vision for a Balanced Regulatory Approach
Caroline Pham has criticized past reinterpretations of existing laws by the SEC and CFTC, which targeted sectors like cryptocurrency and blockchain technology. She has pledged that the CFTC will no longer manipulate laws to criminalize asset classes or technologies, focusing instead on their core mission to prevent fraud and market manipulation.
Commitment to Regulatory Integrity
Despite these pledges, Pham has made it clear that regulations will not be lenient on the crypto industry. She has prioritized restoring consistent legal precedents, ensuring the CFTC’s application and interpretation of the law remain stable. Gemini Trust concludes that meaningful reform within the CFTC requires deep introspection and a long-term commitment to prevent future misconduct. The company has offered to assist the Commission and Inspector General in any suitable capacity.
Conclusion
As the regulatory landscape evolves, Gemini’s case underscores the tensions between innovation in the crypto industry and regulatory oversight. The outcomes of this dispute could significantly impact the future interactions between crypto exchanges and regulatory bodies.
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