Singapore-based artificial intelligence company Genius Group is facing significant restrictions on expanding its Bitcoin holdings due to a recent legal ruling in the United States.
A recent press release revealed that on March 13, a New York District Court issued a preliminary injunction and temporary restraining order against the firm. These orders specifically prohibit Genius Group from selling shares, raising new funds, or using existing investor funds to purchase additional Bitcoin.
What Really Happened?
The legal action stems from a contentious merger between Genius Group and Fatbrain AI, finalized in March 2024. Following the merger, Genius Group initiated arbitration procedures to terminate the agreement in October of the same year, accusing Fatbrain AI executives of fraud.
Subsequently, Fatbrain AI executives Michael Moe and Peter Ritz sought a temporary restraining order in February to prevent Genius Group from engaging in certain financial activities, including further Bitcoin purchases, until the arbitration is resolved.
Due to the imposed legal restrictions, Genius Group has been forced to scale back various aspects of its business operations. The company stated that it has closed several divisions, halted marketing campaigns, and, notably, started liquidating its Bitcoin reserves.
To maintain operational liquidity, Genius Group recently sold 10 Bitcoin from its total holdings of 440 BTC, currently valued at over $23 million. The company warned it might need to further reduce its Bitcoin holdings if the injunction remains in place.
The firm explained in its public statement.
Genius is taking all necessary measures to minimize Bitcoin sales but anticipates that it will need to downsize its Bitcoin Treasury in the coming months in the event the PI remains in place. As at today’s date, the Company has had to reduce its Bitcoin holdings from 440 Bitcoin to 430 Bitcoin.
Broader Legal Challenges and Repercussions
In addition to the injunction, Fatbrain AI shareholders have filed two separate lawsuits against Genius Group and Fatbrain AI executives Moe and Ritz. These lawsuits, initiated in April 2024, claim that federal securities laws were violated during the merger process.
Genius Group has been blocked by the US District Court Southern District of New York from selling shares or raising funds, and specifically banned from buying Bitcoin, in direct opposition to the wishes and approvals of the Company’s board and shareholders.
We will keep fighting… pic.twitter.com/Lk6uXzfCx6
— Roger James Hamilton (@rogerhamilton) April 3, 2025
The impact of the injunction extends beyond financial operations; Genius Group claims it has been compelled to breach Singaporean law by suspending share-based employee compensation schemes, which were part of existing employment agreements.
The company’s CEO, Roger James Hamilton, expressed his frustration and surprise, stating:
We especially did not expect that such destructive actions could be successfully achieved through the courts by individuals who were actively working against the interests of our company’s shareholders and Board.
Featured image created with DALL-E, Chart from Tradingview
