A financial agency has asked a federal judge to reverse its own court victory against Gemini Trust, a cryptocurrency firm whose founders are close to President Trump and have invested in Trump family ventures.

The Commodity Futures Trading Commission, which regulates specialized financial markets including some crypto transactions, now says that it should never have sued Gemini for misleading agency officials over its Bitcoin business. Without acknowledging guilt, Gemini had agreed in January 2025 to settle the case and pay a $5 million fine.

In a joint filing with the firm late Wednesday, the commission asked a federal court to nullify the consent order reached in the case, which had been filed under the Biden administration.

The filing then took a swipe at the commission’s own legal staff, saying the evidence against Gemini was flawed and its lawyers’ conduct “fell short of the standards expected of any litigant, much less a federal agency.”

The move is the latest in a series of actions the commission has taken since Mr. Trump’s return to office that have benefited companies involved in cryptocurrencies or prediction markets. The Trumps are heavily invested in both mushrooming industries, which make up an increasingly important part of the commission’s oversight responsibilities.

A New York Times investigation published on Sunday found that the commission has shrunk its work force, purged career officials, sharply curtailed crypto enforcement and given a helping hand to prediction market firms.