Genius Group Halts Bitcoin Purchases Following US Court Injunction

Singapore-based AI firm, Genius Group, has been temporarily prohibited from expanding its Bitcoin holdings. This comes after a US court issued a preliminary injunction (PI) and temporary restraining order (TRO), preventing the company from selling shares, raising funds, and utilizing investor funds to purchase additional Bitcoin.

The court order, issued on March 13th by a New York District Court, stems from an ongoing dispute related to Genius Group’s merger with Fatbrain AI. The merger, finalized in March 2024, was followed by Genius Group initiating arbitration proceedings in October to terminate the agreement, citing allegations of fraud against Fatbrain AI executives.

Fatbrain AI executives, Michael Moe and Peter Ritz, subsequently filed for the TRO and permanent injunction in February. This legal action effectively prevents Genius Group from several key financial actions, including Bitcoin acquisitions, pending the arbitration’s resolution.

The injunction has had far-reaching consequences for Genius Group, forcing the company to close divisions, suspend marketing initiatives, and liquidate 10 BTC (worth over $23 million at the time) from its 440 BTC treasury to maintain operational funding. The company hasn’t ruled out further Bitcoin sales if the PI remains in effect.

Genius Group’s CEO, Roger James Hamilton, expressed concern that complying with the US court order requires the company to violate Singaporean law by halting employee share compensation outlined in employment agreements. He stated that the company is "taking all necessary measures to minimize Bitcoin sales" but acknowledges potential future sales if the injunction persists.

Source: Roger James Hamilton

In April 2024, Fatbrain AI shareholders filed two lawsuits against Fatbrain AI executives and Genius Group, alleging violations of federal securities laws. These lawsuits, which claimed shareholder fraud exceeding $30 million, were eventually dropped against Genius Group on February 14th.

Source: Google Finance

The legal battle has significantly impacted Genius Group’s share price, which has plummeted from an all-time high of over $96 in June 2022. The current situation highlights the complexities of navigating international legal jurisdictions and the unpredictable nature of legal challenges affecting cryptocurrency investments.