Crypto Exchange Gemini’s Motion to Restrict CFTC Evidence Draws Opposition Filing
On Wednesday, July 3, 2024, the Commodity Futures Trading Commission (CFTC) filed an opposition memorandum in response to a motion filed by Gemini Trust Company seeking to limit evidence and arguments in an ongoing case between the two parties.
The lawsuit centers around allegations that Gemini provided false or misleading information to the CFTC during the process of certifying a new Bitcoin futures product. As part of its regulatory responsibilities, the CFTC reviews such certifications from exchanges to evaluate compliance with core principles that aim to prevent market manipulation.
In its motion, Gemini requested the court issue a pretrial order prohibiting the CFTC from presenting evidence or arguments on six different issues relating to the agency’s internal review and decision making regarding Gemini’s application. However, the CFTC argued this motion constitutes improper use of motions in limine, which are meant to streamline trials by resolving discrete evidentiary issues in advance, not make broad prohibitions.
The opposition memorandum stated the motion lacks legal basis and fails to identify any specific evidence for exclusion. It characterized the motion as a “preemptive weapon” rather than a legitimate use of judicial discretion over evidentiary issues. Gemini’s motion also incorrectly claimed the CFTC relied on subjective evidence and arguments in its summary judgment filings, according to the opposition.
The CFTC maintained it has consistently described how it would demonstrate through objective evidence and reference to clear regulatory criteria that Gemini’s omissions and misrepresentations were material to the agency’s ability to properly review the certification. This includes highlighting published regulations and guidelines used to evaluate contract market manipulation risks.
In its opposition, the CFTC argued the doctrine of judicial estoppel does not apply since it has not taken any inconsistent positions. It also noted the case law cited by Gemini is irrelevant as it primarily relates to issues like waiver of privilege when good faith defenses are raised, which are not comparable to the CFTC’s invocation of deliberative process privilege over internal discussions.
The opposition memorandum urged the court to deny Gemini’s broad exclusionary request, as evidence should only be precluded on specific grounds if it is clearly inadmissible for any purpose.
Please contact BlockTribune for access to a copy of this filing.
