US regulator tries to withdraw penalty against Trump donors’ crypto company

By Adam Cancryn, CNN

(CNN) — The US Commodity Futures Trading Commission is asking a judge to vacate the Biden-era penalty that it imposed last year on a cryptocurrency exchange run by Tyler and Cameron Winklevoss — prominent donors to President Donald Trump’s 2024 campaign.

The request, filed late Wednesday, marks an extraordinary reversal for the regulatory agency, which had originally accused the Winklevoss twins’ Gemini Trust Company in 2022 of making false statements tied to a bitcoin futures business it had sought to launch.

Gemini settled the charges weeks before Trump took office, including paying a $5 million penalty as part of the agreement.

Yet the CFTC under Trump is now abruptly shifting its stance, siding with Gemini in arguing that the agency should have never filed a complaint in the first place. The new filing argues that the Biden-era investigation was underpinned by a whistleblower account that it has since concluded was not credible, and that Gemini was actually the victim of fraud rather than a perpetrator.

“These findings not only call into question the CFTC’s enforcement process in this instance but also demonstrate the necessity of the federal government’s revised enforcement approach and standards, including in the digital asset space,” the CFTC said in its statement.

The agency said that its effort to vacate its prior settlement also reflects its Trump-era shift in approach to cryptocurrency policy, which has been far more permissive toward the burgeoning industry than it was under former President Joe Biden’s administration.

Though the CFTC is seeking to erase the settlement, a spokesperson said Thursday that Gemini and the agency have agreed that the $5 million penalty would not be refunded to the company.

The Winklevoss brothers, who are best known for their dispute with Mark Zuckerberg over claims he stole their idea for Facebook, have been vocal supporters of Trump and his approach to the cryptocurrency industry. They each sought to donate $1 million in bitcoin to Trump’s campaign ahead of the 2024 election, though those were refunded for exceeding the maximum amount allowed by law.

The two later collectively contributed more than $1 million to Trump’s main super PAC, Maga Inc., just prior to his inauguration last January.

Trump’s original pick to run the CFTC, Brian Quintenz, later accused the twins of lobbying the White House to pull his nomination after he declined to commit to taking action on the Biden-era Gemini settlement. Quintenz served as commissioner of the agency during Trump’s first term.

The president in September withdrew Quintenz’ candidacy in favor of Michael Selig, who now chairs the CFTC.

This story has been updated with additional reporting.

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