The Commodity Futures Trading Commission’s move to revoke its consent order against virtual currency exchange Gemini Trust is “very unusual,” the former CFTC chairman said Thursday on CNBC’s “Squawk on the Street.”
Former Commissioner Tim Massad also said he was not aware of the details of the CFTC’s lawsuit against Gemini, which was founded by the Winklevoss brothers, because the case occurred after he was at the agency, but noted that during his tenure, CFTC staff “filed only strong cases.”
The CFTC on Wednesday asked a New York federal judge to vacate its January 2025 order against Gemini. The order included a $5 million fine and an injunction prohibiting him from making false statements to the CFTC. The order was implemented in the final weeks of President Joe Biden’s administration and related to false statements Gemini made to the CFTC in the second half of 2017 regarding Bitcoin futures contracts.
The CFTC is currently run by Michael Selig, an appointee of President Donald Trump whose 2024 campaign received donations from twins Tyler and Cameron Winklevoss.
According to the CFTC, if a judge signs the request to terminate the consent order, the $5 million already paid by Gemini will not be returned to the company.
“My point is, it’s very unusual for the CFTC to do something like this. It’s very unusual for the CFTC to basically try to reverse a judgment in a lawsuit that you filed,” Massad told CNBC.
“And second, in my experience, the CFTC Enforcement Division has been very professional and acted with integrity and prudence,” he said.
“There were a lot of great public officials who made decisions based on the law and the facts, but they only made strong cases based on the merits.”
“The facts speak for themselves. This lawsuit should never have been filed, and we are grateful that the CFTC is joining us to right this wrong,” attorney Abi Perry, who is representing Gemini in the CFTC lawsuit, told CNBC in a statement.
The CFTC said in a statement Wednesday that it decided to seek revocation of the consent order after a “comprehensive review” of its investigation concluded that “the charges should not have been filed and should not have been brought under current enforcement standards.”
“Accordingly, the CFTC has determined that it is neither in the CFTC’s mission nor in the public interest to continue enforcing future provisions of the consent order,” the agency said.
“The parties are now jointly petitioning the court to set aside the Consent Order with respect to its prospective provisions because the non-prospective provisions of the Consent Order, including the imposition of civil penalties, have already been satisfied and it would be unfair to apply prospectively the remaining provisions, including injunctive relief.”
—CNBC’s Lora Kolodny contributed to this article.
