The White House’s regulatory review office is examining a proposed Commodity Futures Trading Commission (CFTC) rule on prediction markets, according to a federal filing that could shape how platforms such as Kalshi and Polymarket operate across the U.S.

A RegInfo.gov entry shows that the proposal was received by the Office of Information and Regulatory Affairs on May 26 under Executive Order 12866, triggering a review of what the CFTC describes as a proposed rule on “Prediction Markets.” The filing does not include the text of the proposed rule.

The move marks one of the clearest signs yet that the CFTC is preparing a broader federal framework for event contracts, following months of legal and political battles over sports and election markets.

Illinois, New Jersey and other states have argued that sports-linked event contracts effectively function as online betting markets. Kalshi and the CFTC have countered that designated contract markets regulated under federal commodities law fall under the agency’s exclusive authority.

The executive order governs how major federal regulations are vetted before publication, requiring agencies to submit significant rules for economic and policy analysis. OIRA, a division within the Office of Management and Budget, oversees the process.

The timing comes days after President Donald Trump publicly backed the CFTC’s authority over prediction markets, as CoinDesk previously reported, calling it “critically important” that the agency retain “exclusive authority” over the sector in a Truth Social post.

The proposal follows a March advance notice of proposed rulemaking in which the CFTC sought public comment on which prediction market contracts may be prohibited as “contrary to the public interest,” including contracts tied to elections, gaming, and sports.

The US Commodity Futures Trading Commission has asked a federal court to vacate its $5 million settlement with crypto exchange Gemini, claiming that the agency’s enforcement action was based on flawed allegations.

Gemini settled with the CFTC and paid a $5 million fine in January 2025 in the final weeks of the Biden administration after the agency accused it of making false or misleading statements related to a Bitcoin futures contract.

The CFTC filed a joint motion with Gemini in a Manhattan court on Wednesday seeking to vacate the settlement, adding in a statement that it had reviewed the matter and concluded that the “complaint should not have been filed — and would not have been under current enforcement standards.”

The CFTC said the complaint, brought under the Biden administration, was “largely based on a whistleblower’s account known to be lacking in credibility.” 

“Accordingly, the CFTC determined that continuing enforcement of the consent order’s prospective provisions serves neither the CFTC’s mission nor the public interest,” it said.

Source: CFTC

The CFTC’s request adds to a string of crypto lawsuits and investigations that the agency and the Securities and Exchange Commission have abandoned under US President Donald Trump.

Gemini co-founders Tyler and Cameron Winklevoss each donated $1 million to Trump’s election campaign in 2024.

The CFTC’s motion comes after Trump’s former CFTC chair nominee, Brian Quintenz, in September shared on X messages from Gemini CEO Tyler Winklevoss, who asked if he would review the agency’s case against the company if he were made chair.

Trump later withdrew Quintenz’s nomination and instead backed Mike Selig, a former lawyer for crypto companies who has taken a supportive stance toward the crypto industry.

The CFTC’s request seeks to end ongoing obligations imposed on Gemini under the settlement, including an injunction barring it from making false or misleading statements to the agency. 

“Applying the remaining provisions — including injunctive relief — prospectively would not be equitable,” the agency said. It noted that Gemini has already paid a $5 million fine, but it was not clear if the agency would refund the penalty.

The case stemmed from allegations that Gemini made misleading statements in 2022 during the review of a Bitcoin futures contract, particularly regarding its auction volumes and liquidity. 

The CFTC said these claims were relevant to assessing risk and the contract’s approval. 

Related: CME Group to launch regulated Bitcoin volatility futures 

The CFTC’s complaint relied on allegations from a whistleblower in 2017, who claimed that Gemini inflated trading activity and volumes to distort user demand.

The agency argued in its latest filing that the whistleblower’s allegations were based on statements from Gemini’s former chief operating officer and a subordinate, who allegedly made threats against Cameron and Tyler Winklevoss, and was allegedly known to lie about material facts.

The CFTC also argued that Gemini was a victim of fraud, claiming that two customers exploited Gemini’s “preferential fee structures through a coordinated rebate-fraud scheme.”

It also alleged that the two customers admitted defrauding Gemini of $7.5 million through this scheme, but the past leadership “did nothing with those admissions.”

Cointelegraph contacted Gemini and the CFTC for comment.

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Ethereum traded below the $2,000 level as on-chain activity weakened and short-term technical indicators stayed under pressure.

The move came as exchange withdrawal data dropped to its lowest level since June 2024, while failed transactions and exchange inflows showed fresh signs of network and market stress.

Ethereum withdrawals fall to June 2024 low

Data from the Ethereum Exchange Outflow 30D indicator showed that total withdrawals from exchanges fell to about 16.05 million ETH. Arab Chain said the reading marked the lowest level since June 2024.

Lower exchange withdrawals can show that fewer users are moving ETH away from trading platforms. This often points to slower long-term accumulation, especially when price action remains weak or range-bound.

Binance led Ethereum withdrawals with about 7.00 million ETH. OKX followed with around 1.43 million ETH, while Coinbase Prime ranked third with about 1.12 million ETH. Kraken, Bitget, and HTX Global recorded lower withdrawal activity.

The drop does not give a direct bearish signal on its own. Still, it shows that off-exchange activity has slowed at a time when Ethereum is trying to hold key support levels.

Failed transactions and inflows add pressure

Separate on-chain data shared by nino showed that Ethereum failed transactions may be rising. The same update also pointed to a slight increase in exchange inflows.

The analyst described the failed transaction count as “may be experiencing an upward trend” and said the mix of network friction and exchange-bound liquidity “could possibly indicate a somewhat bearish outlook.”

A rise in failed transactions can suggest higher network friction, user errors, or pressure around smart contract activity. It does not always mean demand is falling, but it can weaken confidence when paired with soft price action.

Exchange inflows can also carry market risk. When more ETH moves onto exchanges, traders may prepare to sell, hedge, or reposition. That does not confirm selling, but it adds caution during a weak market.

Ethereum price breaks below $2,000

Ethereum (ETH) traded near $1,986 after falling below the $2,000 mark. The move placed ETH under a key psychological level that traders often watch during market pullbacks.

As previously reported by crypto.news, the broader crypto market remained under pressure on May 28 after Bitcoin and Ethereum broke key support levels. The report said more than $900 million in leveraged crypto positions were liquidated across the derivatives market.

Ethereum also fell as the total crypto market weakened. Bitcoin dropped below $73,000, while major altcoins also posted losses as traders reduced exposure to risk assets.

Santiment said Ethereum’s drop below $2,000 triggered more “buy the dip” calls from retail traders. The firm warned that strong crowd optimism after a sharp decline can sometimes mean the market still has more downside before fear returns.

ETH technical analysis shows bearish bias

Ethereum remains below the Bollinger Band midline near $2,169. That shows short-term weakness because price has not reclaimed the central range.

ETH is also trading close to the lower Bollinger Band near $1,957. This area now acts as a key support zone. A break below it would show stronger downside pressure and could expose lower price levels.

The Bollinger Bands are compressing after the recent decline. The upper band sits near $2,380, while the lower band sits near $1,957. A recovery above $2,169 would be the first clear sign that the short-term structure is improving.

The RSI stands near 29.69, below its moving average near 36.02. This confirms weak momentum and seller control. However, the low RSI also means ETH is close to oversold territory, where short-term relief bounces can form if buyers return.

For now, Ethereum’s short-term setup remains bearish. Holding the $1,950–$1,970 area is important. A drop below that range could keep sellers in control, while a move back above $2,169 would ease pressure and help rebuild recovery momentum.

The crypto market remained under pressure on Thursday as renewed military tensions between the United States and Iran triggered another sharp wave of liquidations and ETF outflows.

According to data from CoinGecko, the total cryptocurrency market capitalization fell roughly 4% over the past 24 hours to around $2.48 trillion, while Bitcoin (BTC) dropped from the $76,000 region to hit a five-week low below $73,000 before recovering slightly at press time.

Ethereum (ETH) fell more than 5% below the $2,000 mark, while major altcoins, including Solana (SOL), XRP (XRP), BNB (BNB), Dogecoin (DOGE), and Hyperliquid (HYPE), recorded losses ranging between 6% and 14% as traders continued reducing exposure to risk assets amid rising macro uncertainty.

According to CoinGlass data, over $900 million worth of crypto positions were liquidated across the derivatives market over the past 24 hours, with bullish long positions accounting for most of the wipeout.

The latest decline accelerated after Bitcoin lost support near $75,000 while Ethereum broke below the $2,100 area, triggering another cascade of forced liquidations across leveraged trading platforms.

As exchanges automatically closed underwater bullish positions, the additional forced selling added more pressure to spot prices and intensified downside momentum across the broader market.

Oil prices jump as U.S.-Iran tensions escalate

Investor sentiment also deteriorated after military tensions between Washington and Tehran intensified again this week.

WTI crude futures climbed 2.6% to trade above $91 per barrel on Thursday, while Brent crude rose toward the $96 region after reports emerged that U.S. forces struck Iranian military targets believed to threaten commercial shipping routes near the Strait of Hormuz.

At the same time, Iran’s Revolutionary Guard reportedly targeted a U.S. airbase, though officials did not disclose the location.

Negotiations between both countries also remained deadlocked, with Iran reportedly insisting on retaining control over the Strait of Hormuz and preserving its nuclear program as part of any potential agreement.

The latest escalation weakened expectations for a short-term peace deal that could reopen the key shipping corridor and normalize global oil flows.

Rising energy prices added to fears that inflation could remain elevated for longer, potentially reducing the likelihood of near-term Federal Reserve interest-rate cuts and tightening liquidity conditions for speculative assets such as cryptocurrencies.

ETF outflows extend as institutions reduce exposure

Institutional demand also weakened considerably over the past two weeks.

U.S. spot Bitcoin ETFs recorded roughly $733 million in net outflows on Wednesday, the largest single-day withdrawal since February this year. The latest exits additionally extended the products’ losing streak to eight consecutive trading sessions.

Meanwhile, spot Ethereum ETFs extended their own outflow streak to 12 straight days after another $67 million exited the funds on Wednesday.

Cumulative withdrawals from U.S. spot Bitcoin ETFs have now reportedly reached $2.33 billion over the past two weeks as institutional investors continued rotating capital away from crypto products during the recent volatility.

In a report shared with crypto.news, Bitfinex analysts highlighted that Bitcoin’s market structure weakened after a recent $766 million liquidation event, rather than undergoing a full leverage reset typically seen after large derivative flushes.

The analysts noted that futures open interest dropped sharply after Bitcoin corrected more than 10% from highs above $82,000. However, leveraged positioning reportedly returned unusually quickly afterward, largely driven by retail traders reopening bullish positions on crypto-native exchanges.

Analysts added that institutional venues such as CME have not shown similar leverage activity, while the Coinbase Premium Gap remained negative despite elevated funding rates.

The report also noted that options traders continued paying premiums for downside protection ahead of Thursday’s U.S. Personal Consumption Expenditures report, the Federal Reserve’s preferred inflation gauge.

“A hot print for PCE on Thursday, 28 May would increase stress on the leverage-long book by shifting the rate path outlook, whereas an in-line print would remove the macro catalyst, forcing the range to resolve purely on positioning dynamics,” Bitfinex analysts said.

Bitcoin is facing a mixed market setup as exchange reserves fall to rare lows while short-term price indicators and holder profitability remain weak.

Bitcoin exchange reserves have fallen to 2,666,753 BTC, according to CryptoQuant data shared by thechessONCHAIN. The last comparable reading came on August 31, 2019, when Bitcoin traded near $9,430. Bitcoin now trades far higher at nearly the same exchange inventory level.

Meanwhile, the drop means fewer coins sit on trading platforms for immediate sale. That can reduce available supply, but it does not guarantee a price rebound. For Bitcoin to move higher, demand must be strong enough to absorb supply and rebuild market confidence.

The current setup differs from 2019 because spot Bitcoin ETFs now create a demand channel that did not exist during that earlier cycle. U.S. spot Bitcoin ETFs started trading in January 2024, and exchange reserves have kept falling during the ETF era.

That shift changes the supply picture, but it does not settle the price outlook. The main question is whether ETF demand and spot buying can offset weak cycle data and cautious holder behavior.

Cycle data keeps Bitcoin bulls cautious

The CryptoQuant Bull-Bear Market Cycle Indicator shows a different backdrop from 2019. On August 31, 2019, the indicator stood at +0.83, placing Bitcoin in a bull zone. Its 30-day moving average was +1.045, while its 365-day average was -0.206.

The latest reading points the other way. In May 2026, the indicator stood at -0.379, while the 30-day moving average was -0.375 and the 365-day moving average was -0.323. That keeps Bitcoin in a weaker cycle zone even as exchange reserves continue to fall.

This means the reserve drop alone does not confirm a bullish trend. The market has a tighter exchange supply, but the cycle indicator has not yet shown the same strength seen in 2019.

Crypto analyst K A L E O also pointed to cycle timing as a bear case for short-term optimism. He noted that past market bottoms arrived much later after halvings and said, “I’d love to see a bounce at $70K,” while also stating that he was ready for more time in the current range.

Long-term holder SOPR shows weaker profitability

Long-term holder profitability also shows pressure. Arab Chain said the long-term holder SOPR has fallen to around 0.87 while Bitcoin trades near the mid-$70,000 area. SOPR tracks whether coins moved by long-term holders are being spent in profit or loss.

A reading below 1 means some long-term holders are moving or selling Bitcoin below their purchase price. That does not always mark the end of a longer trend, but it shows that large or older holders are not selling from a strong profit position.

Source: CryptoQuant

The reading has also moved lower in recent months after sitting at higher levels during stronger market phases. That points to caution among long-term holders after recent volatility and the pullback from earlier highs.

Some traders still view lower SOPR zones as periods of rebalancing. In past cycles, weak holder-profit readings have appeared during consolidation phases before stronger moves returned. For now, the data shows pressure rather than clear recovery.

Bitcoin price analysis: MACD and RSI stay bearish

Bitcoin (BTC) traded near $73,257 at the time of writing, with an intraday high near $75,944 and a low near $72,678. The price remains below the mid-to-high $70,000 area that bulls need to reclaim for a stronger short-term recovery.

The MACD remains bearish. The MACD line is below the signal line, and the histogram is still negative at around -145. That shows downside momentum remains active, although the histogram is not deeply stretched.

The RSI sits near 35.12, below its moving average around 45.03. This shows that sellers still control short-term momentum. RSI is moving closer to oversold levels, but it has not reached a point that confirms a full reset.

Traders are also watching whale positioning. CW said Bitcoin whales had moved toward long positions but warned, “We need to see if they maintain this trend.” 

The short-term bias remains cautious while Bitcoin trades below stronger recovery levels. A move back above the mid-to-high $70,000 zone with stronger volume could improve the setup. Failure to hold current levels may keep attention on support near $70,000 and $68,000.

The U.S. Commodity Futures Trading Commission has moved to vacate the $5 million settlement it reached with crypto exchange Gemini, arguing that the enforcement action rested on flawed allegations. Gemini agreed to pay the penalty in January 2025 after the agency accused the firm of making false or misleading statements related to a Bitcoin futures contract.

In a joint filing in a Manhattan federal court, the CFTC and Gemini asked the court to void the consent order, with the agency stating it had reviewed the matter and concluded that the “complaint should not have been filed — and would not have been under current enforcement standards.” The filing also notes that the complaint “was largely based on a whistleblower’s account known to be lacking in credibility.” The CFTC added that continuing enforcement of the consent order’s prospective provisions would not serve its mission or the public interest.

The case traces to allegations that Gemini issued misleading statements in 2022 during the review of a Bitcoin futures contract, particularly concerning auction volumes and liquidity. The CFTC said these claims were relevant to risk assessment and the contract’s approval. The agency’s complaint relied on a whistleblower from 2017 who purportedly alleged that Gemini inflated trading activity to distort user demand.

The CFTC’s motion also contends that Gemini was the victim of fraud in a separate matter, asserting that two customers exploited Gemini’s “preferential fee structures through a coordinated rebate-fraud scheme,” with the customers allegedly admitting defrauding Gemini of $7.5 million. The agency argued that past leadership did not act on those admissions. The politics surrounding the filing have drawn attention, as observers note a broader pattern of crypto enforcement actions that have faced shifts in priority across administrations.

The filing comes amid heightened scrutiny of crypto firms and a broader regulatory environment that intersects with policy debates on how the sector should be overseen, including licensing, disclosure standards, and the balance between innovation and investor protection. Responding to questions about the motion, Gemini and the CFTC indicated they would seek further comment when the court proceedings proceed. The outcome could influence ongoing obligations under the settlement, including an injunction prohibiting false or misleading statements to the agency, and it remains to be seen whether the $5 million penalty would be refunded if the settlement is vacated.

Cointelegraph’s reporting suggests the case sits within a wider discussion of enforcement posture and policy shifts affecting crypto firms, exchanges, banks, and investors, particularly as regulators reassess precedent and standards for disclosures, risk assessment, and market integrity in connection with novel crypto derivatives products. For context, the original complaint centered on statements made during the Bitcoin futures contract review process, with the CFTC asserting that information about liquidity and auction volumes informed regulatory approvals.

Key takeaways

• The CFTC and Gemini filed a joint motion in Manhattan to vacate the $5 million settlement, claiming the underlying complaint should not have been filed under current enforcement standards.
• The agency says the whistleblower account central to the case was largely lacking credibility, and continuing the consent order’s prospective provisions would not serve the public interest.
• The motion seeks to end ongoing obligations, including an injunction prohibiting false or misleading statements to the CFTC; it remains unclear whether the penalty would be refunded if vacatur occurs.
• The case links to 2022 statements about a Bitcoin futures contract’s auction volumes and liquidity and to a 2017 whistleblower claim about inflated trading activity; the credibility of those sources is central to the dispute.
• Context around the filing frames it within a broader discussion of crypto enforcement posture in the United States and regulatory priorities across administrations.

Unwinding the settlement and the legal questions

The core legal maneuver is a bid to vacate the consent order that accompanied the January 2025 settlement. By seeking to end the injunction and other prospective provisions, the CFTC signals a strategic re-evaluation of the case’s basis and its alignment with current enforcement standards. The agency notes that Gemini has already paid the $5 million penalty, but the question of whether the payment would be refunded if the settlement is vacated remains unresolved.

From a procedural standpoint, the motion frames the original complaint as overly dependent on a whistleblower account that the CFTC now characterizes as lacking credibility. The court will assess whether vacatur is appropriate, balancing past remedial measures with the agency’s current enforcement philosophy and public-interest considerations.

Regulatory context and policy implications

The CFTC’s request to unwind the Gemini settlement arrives amid ongoing regulatory debates about how crypto markets should be overseen, how disclosures should be handled, and how to calibrate enforcement actions in light of evolving market structures. The decision could influence future remedies for similar cases, particularly around whether settlements that involve injunctive provisions should be treated as final, even when subsequent questions about the sufficiency of the original allegations arise.

For market participants, the development underscores the importance of robust, verifiable disclosures in relation to derivative products tied to digital assets. It also highlights the interplay between enforcement actions and consent orders, and how regulators may revisit settlements in light of new standards or evidence. The outcome may affect how exchanges and crypto businesses approach risk disclosures, audit trails, and communications with regulators during reviews of new products.

In a broader regulatory frame, observers note the case against Gemini touches on ongoing questions about licensing, cross-border oversight, and the alignment of U.S. enforcement with international standards. The discussion intersects with policy considerations around MiCA implementation in Europe, the roles of the SEC and CFTC in crypto oversight, and the design of AML/KYC frameworks that govern digital-asset markets.

Notably, the move has drawn commentary about how enforcement actions in the crypto space have evolved with changes in administration and regulatory leadership. The broader narrative, as reported by industry observers, is that aggressive cases in certain periods may be revisited or reframed as policy priorities shift.

According to Cointelegraph, the development should be evaluated in the context of how enforcement actions translate into practical compliance requirements for exchanges, banks, and institutional investors, and how courts adjudicate the balance between remedial settlements and the possibility of revisiting foundational allegations.

Gemini and the CFTC have not publicly released further remarks beyond the procedural filings, and the court has yet to determine the next steps in the vacatur process. Analysts and compliance teams will be watching for the judiciary’s ruling, any adjustments to ongoing obligations, and potential implications for similar settlements involving other market participants.

Closing perspective: The vacatur motion highlights the fragility of consent-based settlements when new standards or credibility concerns arise. As regulators reassess the evidentiary basis of past actions, market participants can expect heightened scrutiny of disclosures, governance, and risk-management practices in relation to crypto derivatives and futures products.

Nearly half of the organizations onboarded into the crypto industry in 2026 are operating at alerting standards that would have made them industry leaders only a few years ago, according to Chainalysis.

In a preview of a report published on Wednesday, Chainalysis said that the crypto industry’s compliance baseline around alert severity, trigger sensitivity and minimum dollar detection floors is tightening, with about 47% of organizations onboarded this year using alerting standards that would have placed them in the top 10% of strictness in 2020.

It added that companies have become more uniform in direct monitoring, where funds arrive immediately from a known illicit source, but there is still a gap with indirect monitoring, where the funds pass through intermediary addresses.

Compliance-alerting standards have improved significantly across the industry over the last few years. Source: Chainalysis

The industry has been raising its security and compliance in response to stricter regulations and growing threats from hackers. North Korean-affiliated hackers alone were responsible for an estimated $2 billion in crypto losses in 2025.

Chainalysis said that in 2020, the industry was still establishing norms, with only 10% meeting the top requirements. However, the rate started increasing in 2023, and now “newer entrants are launching with more aggressive monitoring.”

“This is a sign of rapid ecosystem maturation. Standard compliance configurations today would have been considered industry-leading just five years ago. The industry financial institutions are joining has already built substantial compliance infrastructure, and the bar continues to rise.”

Crypto has a gap in indirect monitoring

Legacy financial institutions have lower triggering thresholds for indirect exposure to both illicit and non-illicit fund flows and are alerted to smaller sums. On average, crypto exchanges set much higher alerting thresholds, and the thresholds vary across categories, according to Chainalysis.

Related: Coinbase execs face new lawsuit seeking damages, insider profit clawbacks

Categories such as ransomware, fraud shops, scams and darknet markets often have indirect thresholds 10 to 20 times higher than their direct equivalents.

“The industry’s gap between direct and indirect monitoring creates an opening for illicit actors to exploit. Organizations that close this gap improve their regulatory defensibility and differentiate themselves as trustworthy counterparties,” the Chainalysis team said.

“The data in this chapter point to an industry in transition, one that has professionalized its approach to direct exposure but which may not yet be treating indirect risk with equivalent rigor.”

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