Singapore-based technology company Genius Group has received a temporary prohibition from augmenting its Bitcoin reserves following a U.S. court’s decision.

The firm declared on April 3 that a New York District Court had issued a preliminary injunction and a temporary restraining order on March 13, preventing it from selling shares, raising funds, or utilizing investor resources to acquire more Bitcoin.

This court action arises from a legal conflict between Genius Group and Fatbrain AI, rooted in a merger and acquisition agreement finalized in March 2024.

Genius Group Moves to Cancel Merger, Claims Fraud by Fatbrain AI Executives

By October 30, Genius Group initiated arbitration to cancel the merger, accusing Fatbrain AI executives of wrongdoing.

In February, Fatbrain AI executives Michael Moe and Peter Ritz filed for the restraining order and injunction, which effectively prevents Genius Group from expanding its Bitcoin reserves and managing normal corporate activities until the arbitration concludes.

These restrictions have considerably hindered Genius Group’s operations, leading to the closure of various business segments, the cessation of marketing initiatives, and the detrimental decision to liquidate 10 Bitcoin from its previously robust treasury of 440 BTC, valued over $23 million. Further Bitcoin sales might ensue if the injunction persists.

“Genius is taking all necessary measures to minimize Bitcoin sales,” the company acknowledged in its statement, adding that it may need to reduce its treasury further in the near future.

The ongoing legal battle has also triggered a series of additional lawsuits.

A U.S. District Court in New York has restricted Genius Group from selling shares or raising funds, explicitly prohibiting the purchase of Bitcoin against the intentions and approvals of both the Company’s board and its shareholders.
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In April 2024, Fatbrain AI shareholders initiated two lawsuits against both Genius Group and its executives, alleging violations of federal securities laws. However, Genius Group was voluntarily withdrawn from these cases in February.

In an unexpected development, Genius Group contends that the U.S. court order is causing it to violate Singaporean law by restricting its ability to issue shares promised to its workforce under compensation agreements. CEO Roger James Hamilton expressed concern about the court’s jurisdiction.

“We never anticipated that a U.S. court could block the company from its intention to issue shares, secure funding, or acquire Bitcoin—activities usually determined by a public company’s shareholders or Board, not a court.”

Genius Group CEO Reaffirms Commitment to Bitcoin Despite Legal Challenges

Despite current legal obstacles, Hamilton reiterated the company’s dedication to Bitcoin, asserting they will “continue to support Bitcoin” even within existing limitations.

Genius Group started amassing its Bitcoin treasury in November 2024, procuring 110 BTC for $10 million. The company is committed to holding over 90% of its reserves in Bitcoin, aiming for a treasury worth $120 million—a strategy that previously caused its stock price to surge by 66%. However, the shares have recently decreased, closing nearly 10% down at $0.23, and continued to slide post-market. From a peak of over $96 in June 2022, the stock has now lost more than 99% of its value.

Key Takeaways

• A U.S. court has temporarily stopped Genius Group from expanding its Bitcoin reserves or raising funds.
• The order arises from a legal conflict with Fatbrain AI over alleged fraud connected to a failed merger.
• Despite operational challenges, Genius Group remains resolved to follow through with its Bitcoin strategy.

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