Key Takeaways
Genius Group is forced to sell Bitcoin due to a US court order blocking financial actions.
Genius Group’s market value has decreased significantly since the court order was issued.
Genius Group, an AI-powered education company, announced today that it must sell its Bitcoin holdings after a US court order blocked the company from selling shares, raising funds, or purchasing Bitcoin.
Genius Group has been forced to reduce its Bitcoin holdings from 440 to 430 Bitcoin following a preliminary injunction granted by the US District Court Southern District of New York on March 13.
The court order comes amid ongoing legal proceedings between Genius Group and parties associated with Fatbrain AI.
Genius Group initiated arbitration in October 2024 to terminate its Asset Purchase Agreement (APA) with Fatbrain AI. In December, both companies agreed to a preliminary injunction related to the agreement.
The situation intensified when Fatbrain AI shareholders filed lawsuits against the company and its executives, Michael Moe and Peter Ritz, alleging fraud in connection with the APA. The SEC also brought shareholder fraud allegations against the firm.
In response, Moe and Ritz sought a Temporary Restraining Order (TRO) and a subsequent preliminary injunction (PI) to block Genius Group from selling shares, raising funds, or purchasing Bitcoin. The court granted both orders.
“We never dreamed that it was possible that a US court could block the company from being able to issue shares, raise funds or buy Bitcoin – all actions that would normally be decided by a public company’s shareholders or Board rather than a court,” said Roger James Hamilton, CEO of Genius Group.
Due to funding restrictions, Genius Group is downsizing, closing divisions, and halting sponsorships, marketing, and investments. The firm said it had already sold 10 Bitcoin to fund its operations.
The court order also impacted the company’s stock performance. Genius Group claimed that since the restraining order was issued, its share price has fallen 53%, with the company’s market capitalization now at 40% of its Bitcoin Treasury value.
Genius Group is pursuing an appeal with the US Court of Appeals for the Second Circuit, aiming to vacate the PI.
The AI education firm started adopting a “Bitcoin-first” strategy in November 2024, transitioning to holding Bitcoin as its primary treasury reserve asset with a target acquisition of $120 million.
Despite being forced to sell some Bitcoin, Genius Group reaffirms its belief in Bitcoin.
“We will also continue to fly the flag for Bitcoin, even when legally banned from building our Bitcoin Treasury. We believe Bitcoin ensures transparency and prevents exactly the kind of wire fraud and shareholder fraud that are the subject of the current lawsuits,” Hamilton said.