CFTC drops $5M Winklevoss case as crypto enforcement shifts under Trump

The Commodity Futures Trading Commission is moving to dismiss a $5 million settlement case from the Biden administration that had drawn criticism from Cameron and Tyler Winklevoss, the billionaire Gemini founders, according to people familiar with the matter.

"The agency's decision to walk away from a fully negotiated settlement sends a clear message that enforcement priorities have changed," said Amanda Fischer, a former SEC chief of staff and financial policy director at Better Markets. "This is exactly the kind of regulatory capture that undermines public trust."

The case, which was settled in the final weeks of the Biden administration, had been a focus of a lobbying campaign by the Winklevoss twins, who argued the penalty was unjustified and politically motivated. The CFTC's current leadership, appointed under President Donald Trump, has now moved to withdraw the enforcement action entirely.

The dismissal follows a broader pattern of regulatory retreat at the CFTC. Under the Biden administration, the agency brought more than 80 enforcement cases involving digital assets. Since Trump returned to office in January 2025, the CFTC has announced only two such cases — both targeting small individual operators rather than institutional players — and has dropped at least five active crypto investigations that were underway before the leadership transition, according to internal records reviewed by The New York Times.

The Winklevoss Connection

The case's dismissal comes amid a wider NYT investigation published May 24 that alleges CFTC leadership systematically removed regulatory obstacles facing crypto firms with ties to the Trump family. Three companies — Polymarket, Crypto.com, and Gemini Titan, an affiliate of the Winklevoss-founded Gemini exchange — all received favorable treatment from agency leadership over the objections of career staff, the report found.

Polymarket received investment backing from 1789 Capital, a venture firm partly owned by Donald Trump Jr., who also serves as an adviser to the platform. Crypto.com struck an exclusive partnership with Trump Media & Technology Group in October 2025 to launch "Truth Predict" on Truth Social. Gemini Titan is an affiliate of Gemini, whose founders back American Bitcoin, a crypto mining venture co-founded by Eric Trump.

Then-acting CFTC Chair Caroline Pham and her senior counsel Brigitte Weyls allegedly intervened directly in regulatory reviews for all three firms, overriding staff concerns, according to the NYT. After leaving the CFTC in late 2025, Pham joined MoonPay as chief legal officer — a company that holds an exclusive partnership with Polymarket. Weyls transitioned directly into a legal counsel role at Gemini Titan, the same firm whose application she had allegedly fast-tracked.

The CLARITY Act Crossroads

The timing of the enforcement shift could not be more consequential for the legislative landscape. The CLARITY Act — formally the Digital Asset Market Structure Act — would hand the CFTC primary authority over spot digital commodity markets, making it the dominant federal regulator for much of the crypto industry. The bill passed the House in mid-2025 and the Senate Banking Committee voted 15-9 to advance it earlier this month.

Democrats are now pushing to include stronger ethics provisions in the bill, specifically addressing presidential family members' financial interests in the crypto industry. Senator Richard Blumenthal wrote on X that "the CFTC has become a craven tool of prediction markets and shady crypto firms — ignoring national security risks while bullying state regulators and retaliating against staff attempting to enforce the law."

The CFTC has simultaneously sued six states — Minnesota, Arizona, Connecticut, Illinois, New York, and Wisconsin — that attempted to regulate or ban prediction market platforms, arguing the platforms fall under exclusive federal jurisdiction. Minnesota became the first state to criminalize prediction market operations outright on May 19, and the CFTC filed suit within hours.

The White House has dismissed the allegations, with spokesperson Davis Ingle stating that "President Trump only acts in the best interests of the American public" and that no conflicts of interest exist. The CLARITY Act faces its next major test as it moves toward a full Senate floor vote, where the outcome will determine whether the CFTC — an agency now at the center of a political firestorm — receives sweeping new powers over the digital asset industry.

This article is for informational purposes only and does not constitute investment advice.