Key Takeaways
- Genius Group announced that it is forced to sell its Bitcoin holdings after a US court blocked the company’s financial actions.
- Genius Group was instructed to reduce the BTC holding from 440 to 430 after the US District Court Southern District of New York on March 13.
- Genius Group initiated the arbitration to cancel its Asset Purchasing Agreement with Fatbrain AI.
- Genius Group claimed that after the court order, its shares have fallen by 53%.
The Legal Proceedings: Genius Group & Bitcoin Holdings
The leading AI-powered education company, Genius Group, has announced that it is forced to sell its Bitcoin holdings after a US court blocked the company’s financial actions. The court has restricted the company from raising funds, purchasing Bitcoins, and selling shares. The company is forced to reduce its Bitcoin holdings as well. They were instructed to reduce the BTC holding from 440 to 430 after the US District Court Southern District of New York granted the preliminary injunction on March 13. The court order is released during the ongoing legal proceedings between the parties associated with the Fatbrain AI and Genius Group.
In October 2024, GeniusGroup initiated the arbitration to cancel its Asset Purchasing Agreement with Fatbrain AI. Both parties have agreed to a primary injunction concerning the agreement by December. The situation worsened when the shareholders of Fatbrain AI filed a lawsuit against Michael Moe and Peter Ritz, the executives of the company, alleging fraud related to the Asset Purchasing Agreement. SEC has also notified of shareholder fraud allegations against the company. In their response Moe and Rtiz filed for a Temporary Restraining Order (TRO) along with a preliminary injunction (PI) blocking the Genius Group from selling their shares, raising funds, or purchasing Bitcoin. The US court has granted them both orders.
Genius Group: The impact of the court order
The CEO of the company expressed that he had never thought could restrict the company from issuing shares, raising funds, or buying bitcoins. These actions are normally decided by the board of directors or the shareholders rather than the court. The court order has significantly affected the company. The funding restrictions have downsized the company, closing the divisions and halting the sponsorships, investments, and marketing. The firm confirmed the sale of 10 Bitcoins to fund its operations. The court order also had a significant impact on the stock performance of the company. The company claimed that after the court order, its shares had fallen by 53%. The current market capitalization of the company is 40% of the Bitcoin Treasury Value.
To vacate the preliminary injunction (PI), Genius Group is pursuing an appeal to the Second Circuit with the US Court of Appeals. The Bitcoin-first strategy was adopted by the AI education firm in November 2024. They have started the transition of the Bitcoin holding as the primary reserve asset of the company. They have a target acquisition of $120 million. Despite the current scenario of selling Bitcoin, they still confirm their belief in Bitcoin.
Genius Group: False Statement
Genius Group claims that the injunction was based on incorrect statements and filed motions to remove the restrictions. They also submitted records of a meeting with Ritz, alleging he detailed a strategy to execute the court order to extract money from Genius Group. According to the note, Fatbrain AI shareholders also filed this transcript in their lawsuit against Moe and Ritz in Florida
Roger James Hamilton, Genius Group CEO stated that the company did not anticipate that the US court could restrict its financial decisions. He also said that they had dreamt that it was possible that a US court could block the company from issuing shares, and raise funds to buy Bitcoin. All these actions were decided by a public company shareholder or board rather than a court.
The court ordered Genius Group to restructure its operations including downsizing, closing divisions, and halting sponsorships, marketing, and investment plans. The company could not issue share-based compensation to employees as it is a violation of Singaporean labor laws.
Since the restraining court order, Genius Group’s share price dropped 53% and its market capitalization is now at 40% of its Bitcoin treasury value. An emergency motion was filed in the US Court of Appeals by the company for second circuit to overturn the injunction. Genius Group adopted this Bitcoin strategy in November 2024. It aimed at holding Bitcoin as its primary treasury reserve asset.
Genius Group: What do you need to know?
Genius Group is a Bitcoin-first business that delivers AI-powered education and acceleration solutions for the future of the work. Genius Group serves 5.4 million users across 100 countries through its Genius City model and online digital marketplace of AI training, tools, and talent. It provides personalized, entrepreneurial AI pathways that combine human skills with AI skills and AI solutions.