The regulator and the regulated company agreed that a settlement should be set aside. The court still required a legal basis for doing so.
U.S. District Judge Alvin Hellerstein rejected the CFTC and Gemini’s joint request to undo their settlement on October 15. The January 2025 agreement imposed a US$5-million penalty, which Gemini had paid.
The parties argued that the case would not have been brought under the agency’s current enforcement approach. Hellerstein found that they had not met the standards for relief. The settlement remains intact.
Enforcement discretion and judicial finality are different
A regulator can reassess how it uses its enforcement resources. That does not necessarily establish grounds to remove an existing court order.
The distinction matters because settlement moves a dispute into a different procedural position. The parties are no longer simply deciding whether to litigate; they are asking a court to alter an outcome already embodied in judicial relief.
Agreement between them does not eliminate that further inquiry.
What the ruling does not establish
The decision should not be described as a ruling that regulatory settlements can never be modified.
It establishes that the request before this court did not satisfy the applicable requirements. The nature of the order, the relief sought and the grounds advanced remain important.
Likewise, a refusal to vacate does not turn a settlement into a trial judgment establishing every underlying allegation.
Why Canadian counsel should care
The proceeding concerns U.S. law. Its comparative relevance is the need to distinguish policy changes from procedural grounds for reopening completed litigation.
When advising on settlement, counsel should consider the continuing obligations alongside the immediate payment. Injunctive provisions, reporting requirements and restrictions on future conduct may remain important after the financial component is satisfied.
If circumstances later change, identifying the precise obligation and the legal route to relief becomes essential.
A lesson for settlement negotiations
An agreement should be assessed on the basis that its obligations may endure through changes in leadership, enforcement emphasis and commercial conditions.
The possibility of future modification should not substitute for understanding the terms at signing.
A new enforcement philosophy does not automatically supply a new ending to an old case.
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Sources: Reuters: October 15 ruling · CFTC statement on its request for relief .